Are you a first time home buyer? Excited to have your first land and houst purchase?
Whether you are in Victoria or not, it doesn’t matter. This article will help you with the process of buying your new home.
Remember this…In any real estate purchase, Bigger deposit, better position! You heard it right!
This guide will discuss more about it and other schemes that will help you be eligible for any opportunities and event grant that are applicable for you as a first time home buyer.
While some lenders can offer low-deposit loans of under 10% of the home buying purchase price, saving on costs around 20% can offer serious benefits.
20% Deposit Loans for First Time Home Buyers
- Access to a wider pool of lenders and products for your home loan as a first home buyer
- You just need to borrow less money loan overall. No need for any complicated calculator.
- It’s a clear sign to potential lenders that you are good at managing money.
If a new client and first home buyers saved less than 20%, there are lenders who can help.
Take note though that deposits of that size may require Lenders Mortgage Insurance (LMI). This adds more fees and another layer of assessment of suitability.
LMI providers are separate businesses and often have quite strict rules like:
Lenders use it to assess a person’s eligibility for a loan. Some non-bank lenders will review their financial circumstances as a whole, so their credit rating is not always the defining factor when they apply for a loan.
But it does matter. Especially if the loan will cover your retirement years too.
Credit scores are closely linked to home loan applications so understanding what makes up and affects your credit rating is important for you as a home buyer.
We would really advise you to to get hold of a copy of your personal credit file and review credit rating.
This includes any defaults listed against your file. Mistakes on your report are not uncommon – if you pick up on them, you can get altered and save headaches later on.
You can easily get a free credit score online. You can Google it or check the Australian Government’s Money Smart Website for quick links.
Lender Protection Fees
They probably have some idea where you want to buy your house and how much they want to pay. Now it’s time to work out how much you can reasonably borrow.
You will need to take various home loan fees into account, like stamp duty, legal fees or Lender Protection Fees (LPF). For first home owner grant, you also have to check some hidden fees.
You should also think about your current situation, your income and expenses, any dependents (kids or parents), and any lifestyle changes your can see coming up .
Like a job change or starting a family, you need to think about what’s likely to happen in the near future – as well as now. It is just like having a personal finance department for your land and house purchase.
If the home loan doesn’t fit, you as a first time home buyer shouldn’t sign up for it!
There are more things to consider with a home loan than just the interest rate. There are redraw and offset facilities, refinance costs, repayment flexibility, fixed or variable interest rates, loan terms and fees. As I have mentioned, there are also first home owner grant fees that has to be disclosed along the process.
Make sure that you as a client will do extensive research regarding the loan options available and examine them all.
It will surely pay off if you will know more about first home owner grant, other grant available, better and cheaper real estate options, and other necessary things that will help you be on the right track as you purchase your first home.
What is First Home Super Saver?
The first home super saver (FHSS) scheme was introduced by the Australian Government in the Federal Budget 2017–18 to reduce pressure on housing affordability. The FHSS scheme allows you to save money for your first home inside your super fund.
Research, research, research before buying your home!
Did we mention research?
Often the difference between a diamond in the rough and a dodgy deal is simply the buyer’s level of market knowledge.
So the more first home buyers know about the property market and where you want to buy, the better. You will be on the right track with your real estate investment..
You could actually talk to a seller too and ask how was their first home buying experience. Gain insights and compare them to the new trends you know.
You should look at average prices over the last decade, proximity to shops, schools and transport, rental returns etc. Have a handy online calculator that you could access anytime you would want to compare projected costs.
You would want to be sure the area has what it need in terms of both lifestyle and growth opportunity. Your land proximity matters
Find New Potential Investment
Speaking of growth opportunity, we would love to advise that sometimes the best locations for property growth are not the ‘hot’ suburbs but the suburbs next door.
These often provide a cheaper entry point and greater potential for development. Just take note of this exemption. Again use a calculator for comparisons.
Likewise, a brand new or newly renovated property will generally charge a premium for the look.
An existing, lived-in home may not look as pretty, but it can be much better value and let’s them add your own personality to it. You should also study every investment home loans rates.
If they don’t have the finance, don’t make a bid. This is a top tip for a first time home buyer.
There’s no cooling-off period at auctions, once you’ve made an accepted bid that’s it. Buyers without finance approval can find themselves in serious strife if they sign a sale contract.
To be on the safe side, you should hold a letter of finance approval from the lender. That way you can negotiate from their department regarding your purchase price without worry.
If you are ready to enter the market, we can help you out with these tips during your land and property search. We could help you find the dream home they’ve been looking for. Let us be your go-to mortgage department and finance specialist for your new home.
Get Help for Yourself as a First Time Home Buyer
If you’d like more information, talk to us today.
With all sincerity, we are here to help you all-in for a smooth grant of your first and new home.
We are from Victoria but we certainly open our lines to support you wherever you are. No exemption as we are passionate with what we do.
We help first-time homebuyers all throughout the new homes buying process. We will guide you with any scheme, duty exemption, costs savings, and other needs.
More importantly, we are more than able to give you what you need.
Please take note that how much you’ll save will depend on whatever info that you would also provide us. We will help you land your first loan smoothly.
We are excited to help more first home buyers to their new investment venture to becoming an official home owner.
About loans more generally or about how we may be able to help you get you in touch with a lender that can help if the major banks say ‘no’ to your first home loan application.
Let us be your go-to mortgage broker in Victoria and across Australia.
Disclaimer: Original content source: Pepper Money. It is designed for publication through Accredited Brokers, to provide you with factual information only, and it is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Pepper nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 1300722494.