First Home Buyers

If you are visiting this page, firstly congratulations! You are working towards finally getting your hands on your very first home! It’s Big step!

The information on this page will help you with answers to a lot of the frequently asked questions (FAQs) of first home buyers and answers in plain English, we understand it can come across a bit confusing.

We also have our regular articles/posts with first home buyers advice that is current and up to date.

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How Much Deposit do I Need for my First Home Loan?

I can really depend on the type of home loan you are looking for and the bank/credit union/finance company you are borrowing from. As a general rule of thumb: if you are buying the home to actually live in, you will require anywhere from 10-20% of the house price.

If the home or apartment is purely for an investment, ideally you would required 10% of the purchase price. It is possible to get away with a little less, however there will be some guidelines around whether or not you are able.

How Will They Let me Borrow so I can Buy my First Home?

This will differ from lender to lender and ultimately will come down to your ability to repay the home loan. What can affect the amount is your history with the particular institution you are borrowing from (for instance, if you have been with your bank for many years, they can give you some points for loyalty), your credit rating, weekly wage, and your personal assets.

The best way to get a good understanding is by using some of the calculators that are available online.

How do I Find the Best First Home Loan for me?

Probably the best way is to do as much research as possible as you can. My Mortgage Loans provides regular updates that can help you get a wide understanding of what is happening, but this should never be your only point of research, especially online.

Mortgage Brokers charge for their time but it is completely worth every penny. Expert loan advice can save you incredible amounts in the long term if you are willing to fork out the cash in the beginning. In our own personal experience when going for our first home loan, our mortgage broker really opened our eyes as to all the benefits and also the fine print in many applications.

How Much Stamp Duty do you Normally Have to Pay?

Each state or territory has their own individual rules and calculations around the tax. It is based on the selling price and therefore can be significant however some states and territories offer further concessions on the duty payable. There are various government grants and offers by other organisations that give 1st home buyers a break in taking much of the stamp duty sting away as possible. However, if you feel that the stamp duty is a bit too much, be prepared later for rates and other ongoing expenses on top of your mortgage. Make sure you do the maths properly in the early stages.

Is there still a First Home Owners Grant?

If you are an Australian citizen or permanent resident with the intention of living in the home you build or buy within 12 months of the settlement, then you are eligible. For further information on eligibility and grants contact your local State Revenue Office.

What Other Fees are There When you Buy Your First Home?

These additional fees and charges may include:

  • Building inspection
  • Solicitor/Conveyancing fees
  • Insurance including Lenders Mortgage Insurance (LMI)
  • Valuation fees
  • Rates
  • Connection fees - phone/gas/electricity/internet/foxtel
  • Removalist fees

When borrowing more than 80% of the value of the property most banks and financial institutions require LMI. As the name suggests mortgage insurance protects the lender if the borrower defaults and the property sells for less than the outstanding balance on the loan. The borrower remains liable for any balance owing under the contract even if the insurer has paid that amount to the lender. This insurance gives buyers the opportunity to purchase a property with a smaller deposit and the amount is added to the loan.

What Documentation will I Need to Apply for a Home Loan?

When submitting your home loan application obviously you need to produce supporting documentation that confirms your identity and income. These documents will include:

  • Bank statements
  • Birth certificate
  • Tax returns
  • Driver’s license
  • Recent pay slips