First Home Buyers

Exciting and Stressful

Purchasing your first home is an exciting, life changing milestone for anyone; all those years of saving your money to enable you to have a piece of land you can call your own. Although exciting, without some assistance it can be a stressful process, not knowing how much you can borrow, what your repayments will be, how much deposit you need, how much you are looking at in fees and charges, exactly how the first home owners grant works and how much are you entitled to; these are just a few questions that you may be thinking.

Many first home buyers deal directly with a bank that they have had a relationship with in the past or that their parents are currently banking with. There is an expectation that the bank is offering you their best product for your individual situation.

Are banks all the same?

There is also the assumption that all banks are the same but believe it or not that couldn't be further from the truth. It is an extremely competitive market and the banks and financial institutions are competing against one another to get YOUR business, the majority of people do not shop around with various financial institutions; who has the time or really understands their options?

We work with you to determine your borrowing needs and capability, select a loan from a variety of financial institutions that best suits your circumstances and manage the process through to settlement.

Lake Macquarie Home Loan Centre has helped many people fulfil their dream of buying their first home. Let us show you how close you may be to buying your first home.

Email our Team for all the First Home Owners Grant information.

Overview

Buying your first home should be an exciting and satisfying experience and with a little knowledge and preparation there is no reason why it shouldn't be.

There are a number of things to be aware of ranging from the various government benefits for first home buyers to understanding the requirements the various lenders place on you before they will give you a loan. Don't be worried about the number of things to consider ...that's where we come in.

Our service at Lake Macquarie Home Loan Centre costs you nothing and we provide top quality professional assistance the whole way through the entire process.

We'll explain to you how government grants and stamp duty exemptions can save you up to $26,000 off the cost of your new property in some states. So clearly these benefits are worthwhile if you're eligible! As a first home buyer, items you should consider :

The First Home Owners Grant - $7,000 (+ an extra $3,000 in Victoria) grant provided by the federal government
Stamp Duty Exemption schemes - various schemes provided by the state governments
Deposits required - the amount of deposit you need to provide
Loan capacity - your capacity to borrow money from the various lenders as determined mainly by your income
Your repayments - what your loan repayments will be at various loan amounts

First Home Owners Grant

To be eligible for the federal government's First Home Owners Grant scheme you must be an Australian citizen or permanent resident and you (and your spouse/partner) must have not previously owned a home in Australia.

If there are 2 applicants, at least one applicant needs to be an Australian citizen or permanent resident to qualify. The grant amount varies from state to state. In NSW, QLD and the ACT it is currently $7,000. In VIC, first home buyers receive an extra $3,000 ($10,000 in total) and in some cases with a new property purchase even a higher amount is claimable. In VIC however stamp duty exemptions are not as favourable as some other states. The government gives you the First Home Owners Grant in the form of cash to add to your deposit and this is usually paid at the time of property settlement.

The property you buy must be an owner occupied property and legislation introduced back in 2004 requires you live in the property for a period of at least 6 consecutive months commencing within the first 12 months after purchase. Therefore there is some flexibility in complying with this legislation and you still may qualify if you:-

decide not to live in the property straight away or alternatively
live in it for six or more months and then rent it out following that The First Home Owners Grant application can be submitted up to 12 months after the property purchase has settled however Lake Macquarie Home Loan Centre usually recommends you request that your chosen Lender arrange this up front for ease and simplicity.

This is done at the Lender's discretion. A current First Home Owners Grant application form needs to be completed to apply. If you are looking to buy a home or investment property in the near future, we recommend the following:-

Firstly, you can click on the following link to go to our online enquiry form. It only takes 5 minutes to complete and with this information we can assess your loan options. Note that this is not a loan application and its no obligation...it just allows us to work out your loan capacity and inform you of what position you are in. We will then send you your assessment email.

Stamp Duty Concessions

Stamp Duty Concessions In NSW first home buyers are eligible for the First Home Plus stamp duty exemption scheme which gives first home buyers discounts on stamp duty payable dependant on the cost price of the purchased property. Similar to the First Home Owners Grant, eligible applicants must be an Australian citizen or permanent resident and you (and your spouse/partner) must have not previously owned a home in Australia. There are equivalent schemes in other states however the exemptions available vary greatly. More information is available on the following website, www.osr.nsw.gov.au. The First Home Plus scheme in NSW gives a 100% stamp duty exemption for property purchases up to a cost price of $500,000 ($300,000 if vacant land).

A $500,000 first home purchase in NSW for example will have no stamp duty payable (on the transfer of title or on the mortgage) saving around $19,000 in stamp duties normally payable. Above a $500,000 purchase price, purchasers are on a sliding scale of increasing stamp duty up to a purchase price of $600,000 where 100% of stamp duty is payable once again.

Please call Lake Macquarie Home Loan Centre on 49 595711 for exact stamp duty amounts payable on your purchase price.

Your Deposit

If you’re a first home buyer, you will need to provide an amount of deposit towards the purchase of your first home. The amount of deposit is dependent on a number of factors including

The cost price of the property and corresponding loan amount you arrange against your property
The cost of stamp duties and other purchase costs (eg loan application fee, mortgage registration fees, legal costs, mortgage insurance premium
Whether any other security property can be pledged by family towards your purchase The loan amount depends on the policy of the various lenders however in general the maximum loan against your new purchase is either 95% or 100%of the value of the property. There are a few lenders that will lend 100% of the purchase price at the same interest rate as the standard 95% lenders. These no deposit home loans tend to have slightly higher mortgage insurance premiums but the decreased requirement for a deposit is attractive to some people. As you can see, there a number of factors that will determine how much deposit you will need for your property purchase. As a guide in NSW however,
95% loan – the deposit amount you would need ranges from - $5,000 for a $200,000 property to - $15,000 for a $500,000 property
100% loan – the deposit amount you would need ranges from $0 for a $220,000 property to - $10,000 for a $500,000 property (to assist cover of costs). Click here for a sample report indicating deposit required and various purchase costs you may expect on a $300,000 new purchase – note the items marked in yellow. Maximum Loan amount/Property Price

How Much Can I Borrow?

The amount that you can borrow and hence the maximum property you can purchase is usually based on two factors,

your deposit amount and
the amount of income you earn These factors determine your ceiling and usually the amount you can borrow is dependant on which ceiling you hit first. Due to the proliferation of lenders allowing 100% home loans in recent years, most first home buyers are now finding themselves in a position of their income being the “ceiling” they hit first.

Although it varies state by state, in NSW, it means that a first home buyer can purchase a property up to $500,000 with as little as around $10,000 deposit if their income is sufficient. For more information on this topic or any other topics please call Lake Macquarie Home Loan Centre on 49 595711. Remember…. If you would like us to help you work out your loan options – it’s just 5 minutes away by completing our short online enquiry form. Buying your First Home can be a very exciting and life-changing event. As such the process can seem quite challenging and a little daunting too.

At Lake Macquarie Home Loan Centre, it is our mission to make this as easy for you as possible.