Understanding Home Purchases and Rentals in Melbourne

Home ownership is often one of the biggest primary goal for couples and families. But to buy a home, proper planning is usually required to get ready for a purchase. The planning stage for purchasing a home will often take a few years to get financially strong enough to secure a mortgage. This requires a home buyer to show they will likely be able to afford a home mortgage on a long-term payment plan. 

There are often many reasons people are not able to buy a home when they would initially like to. Part of this is because the purchase of a home is one of the most expensive investments of most people’s lifetime. Therefore, getting things financially to obtain financing, requires planning and work. This is often considered to be part of preparing for a long-term financial future. 

Whilst, the monthly payment on mortgages are often not much higher than that of a rental unit, there are many other things to consider. Being able to make monthly payments on a bill is not the only criteria to secure a mortgage. 

Home Mortgage Criteria 

For some people who are looking to buy a home, they are unable to secure a mortgage because they lack a long enough job history to satisfy a mortgage company’s requirement. Most mortgage companies and banks who offer financing for home loans, look to see a clear record of employment with the same company for at least several years. There are occasions where there is room for exceptions on this depending on the buyer and the mortgage company. However, since most home loans are between 25-30 years, one of the main criteria for a mortgage is ensuring a pattern of long term stability in the home buyer(s) employment. 

Another important part of planning for a home purchase, includes having a sufficient down payment needed to obtain a mortgage. Most mortgage companies look for a certain percentage of down payment of the mortgaged amount to approve the loan. This amount varies depending on the price of the home but is usually at least 5 percent of the loan amount. Other considerations include: the financial stability and strength of the buyer, their credit history and the overall economic conditions in the marketplace. 

Most mortgage companies have significant concerns about a new home buyers’ previous debt or credit records. Credit and debt problems can make it very difficult to secure a mortgage. However, through proper planning, old debt and credit problems can usually be repaired. This is usually done over time with new payment plans in place and a positive track record of payments. 

Home Rentals 

For many people who are not yet able to buy a home, finding Houses to rent in Melbourne is a great alternative. Home rentals allow people to enjoy the comfort of being in a home without worrying about home ownership. A rental puts the responsibility of major upkeep to the land lord, not the renter.

Using the services of a real estate professional to locate a good home rental can be quite helpful. In addition, renting a home can significantly help prepare people for the long-term responsibility of homeownership. Home rentals help people to learn more about maintenance and care of a home whilst they rent it.

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