This is a great place to start! The amount you can borrow will be based on your unique set of financial circumstances.
Your income, assets, liabilities and credit history can all affect your borrowing power and each lender will have a different set of criteria.
There are several government grants and schemes available to assist first home buyers with getting into the property market sooner. These may be stamp duty concessions, support with a deposit or an upfront payment. We can work you through these to maximise your finances.
There are a number of extra, often seemingly hidden costs buyers need to be aware of:
Traditionally 20% of the property purchase price is required as a deposit, however it depends on the type of home loan, strategy and lender you select. Some lenders offer options for first home buyers with deposits as low as 5% – 10% plus lenders mortgage insurance (LMI).
The answer is yes, if you have a guarantor (often a family member) who provides security (like their property) to support another person’s home loan. This enables borrowers, especially those with smaller deposits, to borrow 100% of the property price plus costs and avoid paying lenders mortgage insurance. However, being a guarantor means taking on significant responsibility as they become liable for the loan if the borrower defaults.
A home loan pre-approval (or conditional approval) is an unofficial assessment of your borrowing capacity – a lender tells you whether it would be likely to give you a loan, and for how much. It’s a good idea to get a pre-approval before you start looking for a home – that way, you know how much you can spend.
An offset account is a separate transaction account that’s linked to your home loan. You can use it as your everyday bank account, with easy access to your funds and the ability to make deposits and withdrawals whenever you want to. It also gives you the benefit of potentially reducing interest payable on your home loan.
Any money you have in your account is ‘offset‘ against the balance of your home loan, meaning you only pay interest on your home loan balance minus the balance of your offset account. As interest is calculated daily and charged monthly, the more money you keep in your offset, the less you pay in interest. But that also means that as your balance rises and falls, so does the amount it can reduce the interest on your home loan.
A redraw facility gives you the ability to make extra repayments in addition to your minimum fortnightly or monthly home loan repayment. These additional funds can be taken out (or redrawn) if you need them for renovations or to cover an unexpected expense.
The money in your redraw facility counts against the balance of your loan, which lessens the amount of interest you pay. It’s effectively a pool of funds comprising your extra repayments that sits in your home loan account on top of the balance. Keep in mind that these extra funds kept on your loan balance will reduce with regular repayments over time.
Getting into the property market is one of the biggest financial decisions you’ll make. From confusing contracts and jargon filled paperwork to inspections and ultimately, sealing the deal – we’re here to give it to you straight.
Like the homes on your wishlist, no two loans are the same. Step by step, we’ll help you make sense of the nonsense, and work with over 50 banks and lenders to find the loan most suited to your first home.
We help you from start to finish, whilst keeping all the relevant parties and stakeholders in the loop. This causes less frustration on everyone involved and allows for a much smoother process. We also assist with pointing you in the right direction for the various government grants and incentives that may be applicable to you.
