» Loans » First Home Buyers

1. How much can you afford to borrow

Firstly you should work out how much you can afford. There can be a big difference in what the bank thinks you can afford and what you can actually afford.

Short of spending a lot of time doing a mini budget the quick and easy way to work this out is to look at what you are currently paying in rent per week, plus any regular savings per week, plus any luxuries that you can cut back per week.

This total will give you a quick idea on what your weekly affordable loan repayment will be. Using this figure, in conjunction with our home loan calculators, you will be able to calculate an estimated loan amount that reflects this repayment.

For a more accurate indciation on this click on the contact us section to obtain a full assessment free of charge.

2. How much Deposit do I need

There are many factors that can affect how much your lender requires you to have in regards to deposit. For most lenders, a minimum of 5% of the purchase price is required as a deposit.

As time passes more lenders are asking for as much as 10% deposit. Some lenders require this to be what they call genuine savings which means that you can prove that you have either held the money consistanly for a period of generally 3 to 6 months or have continously added to your savings over that same period.

However, the more money you can save, the smaller your loan will be and hence the cheaper your repayments.

To find out how much deposit you need for your circumstances or for a specific property (which can also affect the size of the deposit) click here to contact us.

3. First home owners grant

Normally the government helps subsidise your first home with $7,000. But more recently, until 30 June 2009, they have increased this to either $14,000 for established properties and a massive $21,000 for off the plan, or for you to build a new house with. Each state government has slightly different criteria. Because we deal with this type of enquiries every day we are experts only second to the Office of State Revenue who administers the grant.

4. Stamp Duty

When buying an established up to $500,000 there is no purchase stamp duty applicable for first home buyers in Queensland. If you are buying vacant land as a first home buyer you pay no stamp duty on land up to $150,000. Our Calculator which you can find on our Calculator page on this website will work out your stamp duty as well as other costs in just a few clicks.

5. Lenders mortgage insurance (LMI)

If you borrow more than 80% of the property’s value, you will probably have to pay lender’s mortgage insurance (LMI). This insurance protects the lender should you default on the loan. LMI can be avoided without having 20% deposit and we are happy to dicusss this with you to see if you are eligible. If you have to pay LMI generally there are two options: it is paid upfront or it is added to your loan. Each lender has different policies and we can advise you of these policies during our free consultation.

6. Additional costs

Apart from those already talked about, there are a number of additional expenses you need to take into account when buying a home. Costs include loan application fees, solicitor/conveyancing fees, building/council inspection, pest inspection, home and contents insurance, moving expenses and utilities connections. (our calculator section we list only solicitor & building and pest fees).

To ask questions and to find out more click here or call 07 3850 5000.