Buying a home for the first time is thrilling, but it may also be complicated because there are so many factors to consider. There’s a lot to think about, from finding the appropriate property to getting accepted for a loan, Grants, fees, and interest costs, to obtaining the keys and paying down the loan. We recommend appointing a mortgage broker you can trust & work with.
Set Savings Goals. It’s always good to make a plan, then simply stick to it.
Search “ASIC Budget Planner” for a free tool to prepare your own budget with all your income and expenditure details.
Search FHOG and the state you are buying in e.g. FHOG NSW similarly FHOG VIC and read thoroughly a few times
Determine how much you can borrow; your professional mortgage broker is your best bet here.
The only person that knows how much you can afford every month, fortnight, or week is you.
Choose the best loan product that meets your requirements (Hint: pick the lowest comparison rate not the lowest interest rate & don’t get caught up with offers that appear to be competitive at face value.
| Type of Loan | Interest Rate | Comparison Rate | |
|---|---|---|---|
| Advantage - 2 Year Fixed (Special) | 2.15% p.a. | 2.56% p.a. | Advantage - 1 Year Fixed (Special) | 2.69% p.a. | 3.19% p.a. | Advantage - 1 Year Fixed | 2.24% p.a. | 2.76% p.a. | Advantage - 2 Year Fixed | 2.24% p.a. | 2.79% p.a. | Advantage - 3 Years Fixed | 2.29% p.a. | 2.69% p.a. | The Essential Low Rate Home Loan 60 | 2.29% p.a. | 2.47% p.a. | The Essential Low Rate Home Loan 70 | 2.39% p.a. | 2.57% p.a. |
Research is critical when choosing your first mortgage. Understanding home loan products, repayment to purchasing costs such as stamp duty is critical to avoid any surprises down-the-track. Below are the list of questions and answers which are common for first home buyers when it comes to mortgages.
As a first home buyer, looking through all the mortgages on offer can be daunting. In fact, the whole process can be very, very emotional. Initial excitement can quickly turn to confusion, then anxiety, being overwhelmed, and even confusion. But don’t worry, experienced mortgage brokers are here to help.
They can help you get to know the terminology surrounding mortgages and how to make all the calculations. Professional mortgage brokers understand, being a first home owner generally means you probably won’t understand all the steps required to make your dream come true.
Mortgage brokers can walk you through these steps, starting with working out how much you can borrow, and want that means for weekly or monthly payments. Once you have that information, you can start looking for the house you have always wanted. property, but make it contingent on your mortgage approval. If you can, negotiate 10 days instead of 5. If that’s accepted, then brokers can help you move on to prepare all the documents, and move you from being a first home buyer, to a first home owner.
Property deals need not always culminate in the execution and registration of an agreement. Sometimes, the deal may be abandoned halfway, after the payment of a holding deposit or even after some of the payments have been made. The deal may be cancelled by either the vendor or the buyer, for any reason.
Now, this is no reason for buyers to lose heart, since the vendor will be responsible to refund the money they might have taken from you as the ‘holding deposit’. Also, the terms and conditions about the refund process must be laid in the initial agreement to sell, so that no confusion remains on the subject of refund, if a deal were to fall through.
Australian first home buyer has meant having access to a first home owner grants & incentives. They started as an offset to the GST, and have been used as a mechanism by most Australian States and Territories to stimulate the economy, create jobs and make mortgages more affordable for the first home buyer. They usually take the form of a one-off grant to those who are eligible.
Income and age aren’t usually a factor, and States will often put a cap on the price of the house to ensure those who really need it have access to it. Some States might also make the grants higher for first home buyer mortgages in regional areas, or for new homes only.
In most states, you will need to live in the house for a minimum of six months, and it must be your primary place of residence. To find out whether or not you are eligible, or to work out exactly how the first home owner grants work in your state, contact your mortgage broker, or visit www.firsthome.gov.au
There are two main kinds of loans that can be available to the first home buyer. Knowing how each of them works can be more than just handy, it can save you money, now and in the future. The first one is the variable rate home loan. This can be a good way to leave some money in your pocket, and even give you the chance to pay it off sooner if you want to. The rate referred to is the interest rate, which will usually be lower than a fixed rate loan.
Variable rate loan
As a first home buyer, having a variable rate loan means you can pay more off if you want, without penalties, but it also means the rate may change, either up or down. That can make things hard when it comes to budgeting. With a fixed rate loan, you can fix the interest rate for between one and five years, and renegotiate after that if you want. These mortgages can make it easy for budgeting, as you know exactly how much your repayments will be each time they are due.
Fixed rate loan
If interest rates rise, yours won’t, however, some fixed rates can be higher than variable rates. Some of our fixed rate loans allow you to make extra payments up to $20,000.00 per year if you wish. Having the same access to mortgages as the large lenders also means you can split your loan into periods of fixed and variable interest rates, if you want to, subject to a few conditions.
And finally, construction loans give you the flexibility to draw down your loan as it is being built.
When you are a first home buyer, the reality of having to pay stamp duty can be a real pain. Stamp duty can be different in each State. It is basically a tax the state charges on the sale price. It is calculated on the higher of either the purchase price or the current market value. The cost of it can be quite high, and it can often come as a surprise to a first home owner. Use our stamp duty calculator to help limit your surprise.
