First Home Buyer
Sort your First Home Owners Grant through Our Experts
Get in touch with our mortgage experts and find out if you are eligible to receive this grant,how much you can receive from the grant and how you can use the funds to pay less on your deposit.
We will evaluate your eligibility criteria and help you with all the documentation so you can use your FHOG to the fullest.
Get your First Home Owners Grant with no hassle
How can I purchase a home?
1. Review your financial situation – the first step to buying a home is to know if you can actually afford it. The good news is that the right mortgage broker can help you apply for a home loan at good rates even if you have a small deposit (as low as 5%), meaning that almost anyone can buy their dream home.
, but even then you may still need to pay LMI (Lenders Mortgage Insurance) if your deposit is less than 20% of the property value.
2. Start shopping for a home loan – It’s important to speak to a lender before you start looking for a house so that you have a better idea of exactly how much you can borrow. Most lenders can also pre-approve you for a home loan, as long as you meet their lending criteria. This is especially easier if you have a good credit history, proof of your financial assets, proof of your income, and more. Getting pre-approved for a home loan can also help speed up the overall home loan process.
Worried that you might lose your dream home to someone else? We can help you apply for a Pre-Approved Home Loan before you start looking for your property.
3. Start looking for a property that suits your needs – once you think you can afford to buy a home (or get a mortgage), start looking around a property that is the ideal size, design, in the right location, and suits your preferences. Real estate agents can be a big help during this process as they will be able to recommend the perfect home for you. They can also assist with the negotiation process, and all the relevant paperwork
4. Inspect the property – most investors recommend that you hire a professional home inspector to visit the property and check for any kind of damage or potential problems such as termites, poor plumbing and electricals, and more. This will help you avoid spending a fortune in fixing your new home; if the property does have faults, then you can also use this information to negotiate a better deal with the seller. It’s also a good idea to make sure your conveyancer or solicitor looks over the Contract of Sale.
5. Make a bid and wait – At this point you should have made an offer which (hopefully) is accepted by the seller. Now your conveyancer will be reviewing the contract and coordinating the transfer of the property title which can take up to seven weeks or more. Your mortgage broker will also be helping you with your home loan application for the bank, who will in turn be looking at your loan application, and the property itself.
6. Enter your new home – The day of the transfer of the property, or settlement is the final part of the first home buying process. Prior to this you may need to apply for FHOG, and buy home insurance. You will also have the chance to do a final inspection of the property. Finally you will have to sign your home loan contract with your lenders. All that’s left is to get the keys to your new home!
What kind of government incentives or grants are there for First Home Buyers?
- FHOG (First Home Owner Grant)
- FHLDS (First Home Loan Deposit Scheme)
- FHSS (First Home Super Saver) Scheme
- Homebuilder Grant
- Stamp Duty exemptions (or reductions)
What is FHOG (First Home Owner Grant)?
Introduced in July 2000, FHOG is available to all first home buyers who meet a given set of criteria – this criteria differs from state to state, but the general criteria includes:
- You should not have owned a properrty before (including your partner or spouse if you are buying together)
- You should be an Australian citizen or a Permanent Resident (PR)
- You must live in the property for at least six months
- You must be 18 years or older
Furthermore, the FHOG
- Is available one time only
- Is only available to individuals, and not for trusts, or companies
- Must be used to buy a new property; in case of an existing property, the property must have been renovated extensively
- Can only be used to buy property within $575,000 and $750,000
As mentioned earlier, some of the criteria differ from state to state so it is important to check with your state’s office or your mortgage broker.
Not sure how to apply for FHOG? Our expert mortgage brokers can help you with FHOG, and your first home loan!
What is the FHLDS (First Home Loan Deposit Scheme)?
The FHLDS is a limited guarantee from the government that lets you potentially buy your first home with a smaller deposit, even as less as 5%, and still avoid paying LMI.
The criteria to be eligible for the FHLDS is as follows:
- You must be buying your first home
- Your yearly income must be less than $125,000 ($200,000 for couples)
- You must be at least 18 years old
- You must have a Defence ID (if you are a member of the Australian Defence Force (ADF)
- You must be an Australian citizen
You must have saved at least 5% of the property value, and it must be made up of genuine savings
- You must move into the property within six months of the date of settlement
- You must live in the property as long as your home loan is under the FHLDS
- Your property value must be within the price threshold for that specific suburb and postcode
Speak to your mortgage broker today to find out if you qualify for FHLDS for your first mortgage.
Looking for a Construction Loan? Learn more what the lenders are looking for, and how you can better your chances of getting approved.
How can I be eligible for Stamp Duty exemptions or reductions?
Stamp duty is a tax that you have to pay when buying a property, and the amount can vary based on the state you are buying in. You may also have to pay stamp duty when buying a vehicle, or an insurance policy.
For home purchases, the amount of stamp duty will also vary based on the type of property you are buying, and especially if you are a first home buyer or not.
For first home buyers, some states do not require you to pay the stamp duty, while some may reduce it up to 50%.
Since stamp duty can easily go up to $46,000 or more for a property worth $850,000 in a state like Victoria, being exempt from paying stamp duty will help you use more of your savings towards your mortgage.
What is LVR?
A very common term in home loans is LVR, or Loan to Value Ratio.
This is the ratio of your loan amount and the total property value.
For example, if you plan to buy a property worth $800,000, and your loan amount is $100,000, then your LVR would be 87.5%.
LVR is important as most major lenders will require you to pay LMI if your LVR is more than 80%, i.e. your deposit is less than 20% of the total property value.
What is LMI?
LMI or Lenders Mortgage Insurance is another term that you may have heard in regards to home loans.
This is essentially a type of insurance lenders take out in order to protect themselves from bad loans. While LMI protects the lender and not you, you are the one who is paying for it
Lenders usually get LMI when they perceive a risky home loan – the most common situation is when your deposit is less than 20% of the property value (i.e. your LVR or Loan to Value Ratio is more than 80%).
One way to avoid paying LMI is to save a larger deposit, although you run the risk of losing the property you were looking to buy
Having said that, even if your deposit amount is less than 20%, there are still ways to get a home loan and avoid paying LMI such as by applying for a Guarantor Home Loan.
What is Genuine Savings?
If you’ve spoken to a lender or shopped around for home loans, you may have heard about Genuine Savings.
This refers to any funds which you have saved up by yourself which include, but are not limited to:
- Any term deposits you have had for over three months
- Any money that you have saved up in your bank over the last three months
- Any shares or managed funds from the last three months
Although all lenders have their own definition of genuine savings, as a whole they prefer borrowers who have genuine savings as they are considered more reliable, and are more likely to repay their loans over time, compared to someone who does not have good saving habits.
Can I get a more detailed assessment?
Get a no-obligation, personalized assessment from one of our expert mortgage brokers at ZERO COST.