First Home Buyers

Buying your first home is an exciting time, but it can also be challenging if you don’t know where to start. For most people, a house will be the most important and expensive asset they will ever own. First home buyers know this but not many understand the process of settling the home of their dreams. If you’re a first-home buyer, your budget will be based on how much you’ve saved and the amount of money you can borrow.

Once you have determined your borrowing capacity, the next step is to assess how much deposit do you need, and the general costs involved in buying a property. Being aware of the different stages in the home buying process and knowing what to expect at each step can make it manageable and smooth. As mortgage brokers, we regularly see many first home buyers miss out on their dream home simply because they didn’t obtain a home loan pre-approval before they started looking at houses. Worse yet, panic stricken first home buyers approach us with looming settlement dates fearful they might lose their deposit.

What are the incentives of buying your first home ?

First Home Owner Grant (FHOG)

To incentivize and encourage first home buyers, Australian government has introduced a grant for all the first home buyers. The First Home Owner Grant (FHOG) in Australia is a one off government payment designed to encourage and assist would-be first home buyers across the country to purchase a new property. The size of the grant and the eligibility criteria attached to it differ in each state and territory. In most places it is applied to first time property owners who are either buying or building a new home.

First Home Loan Deposit Scheme (FHLDS)

Launched in 2020, the First Home Loan Deposit Scheme (FHLDS) is a scheme by Australian government to partially guarantee some low-deposit home loans each year This requires deposit of at least 5% of a property’s value, which can help the borrowers avoid the cost of Lender’s Mortgage Insurance (LMI).  This scheme covers, eligible first home buyers looking for a new or existing home.  Check for your eligibility with us.

Stamp Duty Exemption/Concession

When you buy your first home, you may be eligible for Stamp duty exemption or concession depending on your scenario. Unlike the First Home Owner Grant, it doesn’t matter whether you are buying a new or established home

How can Sure Finance help?

Financing your first home involves two major aspects- adequate deposit and your financial standing (credit history/ salary). Below is a high-level overview of these steps and some important terms you as a would-be house owner should be aware of.

Have enough deposit? 

Lender will require you to pay a deposit, which is basically your initial contribution to the purchase amount of the property. Amount of deposit you pay, will determine the kind of loan and amount you may be eligible for your home loan. Saving as much for your deposit can benefit you in the long run. If you have started saving you can start to look at buying house once you have at least 5% of the purchase price (depending on your eligibility for first home grant /scheme/guarantee)

We at Sure Finance can guide you about the deposit required, general costs involved in securing a loan for your situation.

What is your financial standing? 

Your financial standing helps the lenders assess their risk and in providing loan to you. In general, the following is reviewed:

  • Your credit history
  • Your financial stability to assess your ability to repay the debt 
  • Your assets and liability

We can perform the preliminary analysis on your financial standing and guide you along the way to next steps.

What next?

With the help of us at Sure Finance, you can work out which lenders you qualify with and which home loan is most suitable. We will discuss your situation, do a preliminary analysis and once you are ready, we will collect, collate all the information and documentation and approach the lenders in our network to find a suitable loan.

Once you have selected on a loan and a lender that works best for you, we will collaborate with all the other parties to keep the transaction running smoothly through closing day. 

At Sure Finance, you can be assured of our step-by-step guidance of the process of securing a loan for your property.

FAQ’s

What is LVR?

Loan To Value Ratio (LVR)- Loan to Value Ratio (LVR) is the amount you are borrowing against the value of the property represented as a percentage. For example, if you are borrowing $450,000 for a $500,000 property that means your LVR is 90% of the property value. The higher the LVR, the higher the risk to the lender. Typically, first home buyers can borrow up to 95% of the property value (Based on eligibility criterias)

What is Lenders Mortgage Insurance?

Lenders Mortgage Insurance (LMI)- Lenders Mortgage Insurance is an insurance that protects the lender in the worst-case scenario where you default on your home loan. LMI is typically applicable when borrowing more than 80% of the property value. LMI fees go up the higher your LVR is.

What is Genuine Savings Genuine Savings is basically funds that you have saved over time. In general, most lenders require that at least 5% of your deposit come from genuine savings when you are applying for a loan greater than 90% of the property value / LVR.