The stress-free guide for first home owners.
Which Home Loan Is Right For for a First Home Owner
With so many different loan products on the market, finding a home loan is not as simple as it used to be. There is a range of options available to you that may save you money, provide you with greater flexibility and peace of mind.
At Loan Wize, we use our expertise and experience in the home loan market along with a unique computer software program that enables us to compare hundreds of loans in a matter of minutes. We are then be able to provide you with a recommendation of a mortgage that is both competitive and suitable – and ideal for your specific circumstance, simplifying the loan selection process along the way.
First Home Owners may also be able to take advantage of various state government incentives such as Grants for the purchase of an existing or new home, Stamp Duty exemptions, and other additional incentives to purchase their first home. These vary considerably between states, so the best idea is to speak to one of Professional Lending Specialist to find out if there is any Government Grant or incentive in your state. In some cases these incentives can be used to assist with your deposit funds.
Lenders Mortgage Insurance and Genuine Savings
Most First Home Owners have limited deposit funds and seek to purchase a property with the minimum amount of deposit possible. In these cases it is required to have Lenders Mortgage Insurance (most loans where you borrow more than 80% of the purchase price). One of the typical requirements for Lenders Mortgage Insurance is Genuine savings, which is where you can prove that you have had your deposit funds in your account for more than 3 months (6 months in some cases).
It is possible where you have a gifted deposit that you may qualify for an exemption on this policy, provided you have been renting consistently and your real estate agent will vouch for you. Speak to one of Professional Lending Specialist about whether this policy will be available to you.
First Home Owners Frequently Asked Questions.
How much you can borrow, also known as your borrowing capacity, will depend on how much of a deposit you have, your current income and what expense commitments you have. It will also vary from lender to lender.
It is one thing to work out how much you can borrow, but you need to know if you can afford the repayments.
The amount you need as a deposit will depend on the type of home loan and the lender you select. Generally you will require a minimum of 5% of the property value.
Stamp duty is a tax levied on the purchase of a property. It is calculated according to the purchase price of the property and the state or territory the property is situated in.
As a rough guide, you should budget for between 5-7% of the purchase price, in addition to your deposit, to cover fees and charges. While mortgage and stamp duties will make up the bulk of this 5-7%, the balance may include;
– Building and pest reports
– Valuation fees
– Lenders mortgage insurance (LMI)
– Solicitors fees
– Utility connection fees – phone/gas/electricity
– Council and water rates
– Removalist costs
When deciding on the area to live in, apart from considering proximity to family, friends and work commitments, you will obviously need to think about prices. Prices will vary greatly from suburb to suburb.
To help you decide on the right home for you, Loan Wize consultants can arrange for a free report on the area you are interested in.
You can make an appointment with a Loan Wize consultant by calling 07 5443 6522 or 1300 LOANWIZE.