FIRST TIME BUYER HOME LOAN
Taking out a home loan to buy your first home is probably the biggest financial commitment that you will have made or maybe ever make. But don’t be panic, please consult your mortgage broker, they will guide you though every step in organising your finance to buy your first home.
It is important that you know how much deposit you need and how much home loan you can borrow before you purchase a property.
How much you can borrow is based on your income and expense, you can borrow more if your income is higher and expense is less. We will do a preliminary assessment on your borrowing capacity based on your circumstances.
Now we will focus on how much deposit you need to save for your first home. If you are borrowing 80% of the property value which is the most common case where no lenders mortgage insurance is needed, you still need to have deposit available as below:
* 20% of property value
* Government fees: stamp duty (2-4%), mortgage stamp duty, property transfer fee, release and registration fees
* Bank fee and charges: application/establishment fee, valuation fee (sometimes free), security administration fee, normally total several hundreds dollars
* Other cost: legal and conveyancing fees, council rates, building and pest inspection, home and contents insurance, moving cost, normally total couple thousand dollars
If your borrowing capacity let you borrow more in case you don’t have 20% of the property value, and you are happy to pay the lender mortgage insurance to get your first home sooner, the minimum you have to save is the 5% of the value of the property (where lenders mortgage insurance is borrowed into the loan) and the rest of the cost mentioned above. This is subject to different lenders policy and property details you are buying.
If you are qualified for first home owner grant and stamp duty concession, you will save cost for that. Once you know how much deposit you need and how much you can borrow, you can then start your search for a home that you can afford to buy. You can search online to find properties and compare the prices of properties for sale and their historic sold prices so that you can estimate how much they will sell for.
Oneleap Finance (Melbourne based mortgage broker) can assist you throughout the entire process so that you can have a trouble free and stress free experience.