Pre-approval. Stamp duty. Mortgage insurance. Loan to value ratios. Conveyancing fees. These are just some of the terms you come across as a first home buyer. When it’s your first home, it may be the first time you’ve come across some of these terms and it can be daunting.
If you’d like some help navigating your first home purchase, our brokers are here to help. Before you even start looking they can help you calculate how much you can borrow and how much deposit you’ll need for your purchase allowing for expenses like legal fees associated with the purchase. They can also help you take advantage of the Government schemes and grants on offer.
Some other things you might like to consider when purchasing your first home loan are:
- Using a guarantor to help with your purchase
If you’re wanting to avoid the need to pay lender’s mortgage insurance, you will generally need to have a 20% deposit for your home purchase. If you’re buying a property for $500,000 this would mean you’d need a $100,000 deposit. An option to avoid this might be to use a guarantor such as a family member to help provide security for your loan. If they can assist by mortgaging their own property as security, you may need a smaller cash deposit and avoid the need for lender’s mortgage insurance.
2. Using an offset account to reduce your interest
An offset account is an account that’s linked to your home loan account. Any money in this account reduces the balance on which the lender charges interest, meaning you’ll only pay interest on the difference. This is a great way to reduce the interest you pay while also allowing you to access your funds easily. Your broker can give you options for this so you can assess the best home loan product for you.
3. Getting a family member to be a ‘co-borrower’
Recently, one of our clients wanted to purchase her first home however the price of the home was a little too high for her affordability so our team assisted in bringing the client’s mother in as a co-borrower who now holds shares in the property. This meant the first home buyer was able to buy her first home sooner as well as take advantage of the Government’s first homeowner discounts while the co-borrower had an opportunity to own a share of the property for potential future gain.
If you’re preparing to buy your first home, make a time to chat to one of our brokers. They’ll do their best to make your first home buying journey as simple as possible.
Our content is prepared and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. We recommend you consider whether it is appropriate to your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. All information pertaining to loans are subject to lenders terms and conditions and fees and charges and eligibility criteria apply. Although every effort has been made to verify the accuracy of the information, we disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.