5 Tips For First Home Buyers
As a first home buyer, applying for your first home loan is an exciting milestone, but one that can be quite daunting. Getting the right advice from the start is vitally important. That’s why we’ve put together some of our best 5 Tips For First Home Buyers to help you through this important journey.
Top 5 Tips For First Time Home Buyers in Brisbane
Read out the following 5 tips when applying for a first home mortgage in Brisbane, Australia:
1. Know Your Borrowing Capacity and Deposit Requirements
Being a first time home buyer, knowing what you can afford to pay is the best place to start this process. You will need to be familiar with your budget to figure this out.
There are plenty of home loan calculators available that can help you work out repayment rates for your new potential home.
When it comes to your deposit, generally a deposit of 20 percent of the property value is ideal, but not always needed. With a good credit rating and steady income, you could get away with less (sometimes as low as 5 per cent).
However, if it’s less than 20 per cent you may need to pay Lenders’ Mortgage Insurance. Which is an awesome way to still get into the property market without having to save tens of thousands that may take you a further 2-3 years.
2. Get Your Finance Pre-Approved and Start House Hunting
It’s smart to get a pre-approval before you start house hunting so you know exactly how much you can aim towards.
A pre-approval, also known as a conditional approval, is a letter from your lender that tells you how much you’re likely to be able to borrow from the bank.
It also shows a real estate agent – or developer that you are serious. In the current market, some developers for land and builds due to the Home Buyers Grant are wanting to see pre-approvals before they even go to contract.
This also gives you peace of mind that you can afford the property.
A pre-approval is also a requirement to be able to bid at auctions. As once you have put your hand up and win the Auction, it is yours!
3. Choose The Best Mortgage Broker Brisbane
A mortgage broker is essentially a “middleman” between you and the bank. They are a type of financial advisor who specialises in helping people find the right home loan and the right set-up pertaining to your own situation.
Engaging a first home mortgage broker can be an excellent way to find the best value First Home Buyer Loan across a range of lenders for your personal circumstances.
Going directly to a specific bank will limit your loan options to only those that they offer. IE: CommBank will only be able to show you one of their loans – they are not going to let you know that Macquarie for example has a much better rate, lower ongoing fees, and a better digital platform.
If you’re not set on one particular banking institution, then getting a mortgage broker to assess the competition can be a benefit for you in the long run.
4. Take Advantage of Available First Home Owner Grants
The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation.
The scheme is a one-off grant payable to the first home owners that satisfy all the eligibility criteria.
Queenslanders can get $15,000 towards buying or building a new house, unit or townhouse, valued less than $750,000. The grant is paid per new home, not to each of the applicants for the same home.
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. This will help first time home buyers save faster with the concessional tax treatment of superannuation.
If you’re building you might also want to explore the new HomeBuilder grant available for construction between June 4, 2020 through to 31 December 2020. But beware. This grant at the time of this blog – is NOT available to be used as part of your overall deposit for lending purposes.
The HBG is currently paid directly to the client/you. The FHOG can be paid to the lender which means that it can be controlled as part of the overall make up of the funds needed to complete a transaction. And any builders contract you enter into needs to be completed within 3 months of signing the contract. Check out our Facebook page for other information around this as more data is released on how it will play out for clients and lenders.
5. Be Confident When Applying For First Home Mortgage
Let your confidence shine. Many first time home buyers put off applying for a home loan because they’re worried about the state of the property market. And this is even more understandable in our current COVID-19 times.
But the market can move rapidly, so knowing how the loan application works and how much you can borrow will allow you to be ready to purchase when the time is right for you.
If you have saved a deposit, have good stable incomes, clean credit – then now is a great time to be looking to buy – and after Sept 2020 when the artificial support from the government stops, there could be a lot of activity and properties available as unfortunately many people will be forced to sell.
Hopefully, these 5 tips for first time home buyers will help you when applying for a mortgage in Brisbane. If you want more advice, read our comprehensive First Home Buyers guide. North Brisbane Home Loans first home mortgage brokers would be happy to provide the best home loan for first home buyer.
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
