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Your First Home Loan Starts Here

Things To Consider

Before bidding at an auction or putting in an offer on that home of your dreams, consider these points.  Happy house hunting…

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Work out your budget

Buying your first home can be a daunting experience. It is most probably the biggest purchase of your life so it is quite understandable to be a little frightened.

It is important to figure out what you can comfortably afford. Be realistic about what you will need to maintain a comfortable lifestyle once you are in your new home. Use our home loan repayment calculator to determine how much you could borrow based on your calculated budget.  It is also important to know all your associated costs like stamp duty, legal fees and other costs.

A great approach is to try the dry run technique.  This is where you pretend you have a mortgage by putting away the money that you would normally pay towards your loan.  So if you loan repayments will be $3000 per month and you currently pay $2000 per month in rent, then put away $1000 a month as well as a bit extra to cover rates and insurance etc.  Do this for 3 to 6 months to be well on your way to demonstrating affordability to yourself and to the lenders.

Research your target area

Australia is a huge continent. So once you have decided what you can afford, next look at the areas you’d like to live that fall within your budget.  Take a good drive around the areas and ask yourself if you see yourself living in that suburb or pocket.

If you have or are planning to start a family, consider schools in the area.  Access to public transport, shops and medical facilities are important considerations too.  Some schools are zoned so if you want to get your kids in a particular school, make sure the homes you are keen on fall within the zones.

Research median prices in your selected areas so you know what to expect to pay.  This will also prepare you to be one step ahead of your competition.  It’s also a good idea to attend auctions in your target areas; even for homes that you are not necessarily going to bid on.  This is just to get used to the auction process. But remember, buying at auctions is an unconditional sale.  You must have your finance arranged beforehand.

New  vs   Established​

One important consideration is whether to buy a new home (like a house and land package) or an established home.  Some ideas to keep in mind is that a new house means you get a builder’s guarantee and it won’t need any fix-ups; you can just move in and decide where to put your favourite couch.  Although  most established homes are move-in ready, you may still need to keep some budget aside for any personal touch updates you may want to make.  Some original condition homes could need major renovations so do keep in mind that renovations are not for everyone and keep in mind that you may need to live in the house during the renovations. However the rewards at the end of renovations are great, as long as you can stay within your budget and maintain family harmony throughout.

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First Home Owners Grant & Stamp Duty Concessions

When buying your first home, you may be eligible for the First Home Owner’s Grant (FHOG) and Stamp Duty Concessions.  Each state and territory has different qualification criteria.  

Some states or territories limit the grant to new homes only and all of them require that you live in the home.  So buying an investment property using the FHOG is out.  Each state or territory also has an upper limit up to which you can spend in order to qualify.  Depending on the state or territory in which you live, generally the lender will submit your FHOG application but you can also do it yourself if you want to. 

We can help you to determine if you qualify. Just call on 03 8560 5000 for a no obligation chat.

How much deposit do you need​

Generally speaking, you will need 20% of the price of your new home as a deposit.  You will also need to have saved the other costs like stamp duty and legal fees etc.  

You can even borrow up to 95% with some lenders but the lender will need to include the cost of Lender’s Mortgage Insurance, commonly called LMI.  The good news is that LMI is generally added to the loan so you don’t have to pay it up front.  It generally only adds a few extra dollars a week to the average loan but it means that you can borrow  more than 80%.  So with the FHOG and Stamp Duty concessions, you could be a lot closer than you think.  

Call us today on 03 8560 5000 and we can work out just how close you really are to being able to get into your first home.

Speak to us about your loan

So you’ve worked out your budget, got your sights set on an area, decided whether new or established is the direction you want to go, have your deposit or are close to saving it, then it’s time to talk to us. We will work out your eligibility, arrange pre-approval and get you on your way to home ownership as quickly as possible. Getting pre-approval gives you peace of mind when you are out house hunting. You know your budget and you can use the fact to your advantage.

Or if you still have some other questions, we can certainly help steer you through the borrowing maze. Call us on 03 8560 5000 for a no obligation chat.

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    Buying property is an excellent way to build wealth.  Although you may be a first home buyer, you are on your way to property ownership.  Owning your first property can pave the way for future investments.  You can use equity in your first home to help to buy your next home or investment property – you can read more info in our page about refinancing your home.

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