Getting your first home is a pretty big deal. It should be an exciting time for you, but it can also be really overwhelming. You probably have a lot of questions about first home buyer loans. You might not even know where to start. That’s OK, that’s where our team of first home loan brokers come in!
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At Loan Monster, we know how to help first-time home buyers. Our mortgage brokers can sit down with you and guide you every step of the way. We’ll take care of all the boring bank stuff so that you can focus on the fun things, like finding your new home.
But before you start house hunting, you need to know what you can afford.The last thing you want is to get your heart set on something that’s outside your budget.
So, that’s where we’ll start. We’ll crunch the numbers for you and figure out your borrowing capacity for your mortgage loan. You can use an online loan repayment calculator on your own, like the one on our website, but these tools aren’t always accurate. There are many different factors that could impact how much you can borrow. Talk to our mortgage brokers, and we’ll be able to provide you with a more concrete answer.
Before you start house hunting, it’s crucial to know what you can afford. Buying a home comes with upfront and ongoing costs, so budgeting ahead of time is essential.
First, you’ll need a deposit. While a 20% deposit is ideal, lenders often accept less, and low or no-deposit loans are available. However, if your deposit is under 20%, you may need to pay Lender’s Mortgage Insurance (LMI). Other upfront costs include stamp duty (which may be waived for first-time buyers), loan establishment fees, valuation fees, and building inspections.
Once you own a home, ongoing costs include mortgage repayments, council and water rates, home maintenance, and insurance. Home and contents insurance can protect against damage or theft, and mortgage protection insurance can provide financial security if you’re unable to make payments.
Next, we’ll move on to getting your loan pre-approved. While it’s good to know how much you can spend, it’s even better to have a loan pre-approval. It will make builders and real estate agents take you more seriously and you’ll have a much better chance of getting what you want.
There’s no reason why you can’t go straight to your bank. They can calculate your borrowing capacity and get you pre-approved, just like we can.
But there’s one big difference. Your bank can only offer you a very limited number of choices. When you come to a first home buyer mortgage broker like us, we’ll look at loan products and rates across multiple lenders. That means we can give you a far greater range of options.
There are many different home loan products available with many different features and benefits. You should always get professional advice to figure out which options are going to be best for your personal situation.
Your interest rate could be fixed for a set term, or it could be a variable rate that is open to fluctuations in line with changes in the market. Some lenders will also offer split rates, where part of your loan is fixed, and the other part is variable.
There’s a lot of information out there for first-time home buyers. We know it can be a lot to take in. With us on your side, it will get a whole lot easier. Our brokers will break it all down for you to help you make the right choices.
Want to get the ball rolling?
We’re not the only ones who want to help you out. The WA government also wants to make it easier for you to get into your own home. That’s why there are offers in place that only first home buyers in Perth can benefit from.
If you meet the criteria, you could be up for the First Home Owners Grant (FHOG) or the Home Buyers Assistance Account (HBAA). Plus, depending on how much you’re spending on your new home, you might not have to pay any stamp duty.
As a first-time home buyer, you could be eligible to receive a one-off payment of $10,000 through the FHOG to put towards a down payment on your home loan.
If you were looking to pay $350K for your first home, the purchase price would come down to $340K.
You can only apply for the grant if you’re buying or building a new home. If you decide to get an older place, you won’t be able to access the $10K.
There are some other requirements you’ll need to meet to receive the FHOG. Have a chat with us to find out if you’ll qualify.
When you buy a home at any stage, you need to budget for more than just the purchase price. There are other little things that can pop up along the way, like mortgage registrations, valuations, building inspections and more.
The good news is, as a first-time home buyer, you can apply for a grant of up to $2,000 through the HBAA to help you manage it all. If you tick all of the boxes, we’ll be able to put in an application for you. While some of the requirements for the FHOG and the HBAA are a bit different, you could easily get approval to receive both payments.
Stamp duty is basically just a government tax that gets added on to certain purchases. If you buy a car, a house or a block of land, there will most likely be a stamp duty tax that you’ll have to pay.
Luckily for you, as a first time home buyer in Perth you might not have to pay it all. If you buy a house for under $430K or land for less than $300K you won’t have any stamp duty. Even if you end up spending more, you could still be up for a discount.
When you come to us, we’ll figure it all out for you. Our brokers will let you know how stamp duty will work in your particular situation.
You’ve calculated your costs. You’ve got pre-approval. Now you can get to the fun stuff and start going to home opens.
When viewing potential properties, make sure you go in with a clear idea of what you want. It’s worth making a list of what’s non-negotiable versus what would be nice to have and what you’re willing to compromise on.
You should also consider more than just the house itself. Look at the surrounding neighbourhood – take note of how the community feels and what amenities are nearby. The location you’re living in is just as important as the roof over your head.
Once you’ve found a property that ticks all the boxes, you can put in your offer and put down a holding deposit. During negotiations, the owner of the property can entertain other offers. If they decide to go with another buyer, your holding deposit will be refunded to you.
If your offer is accepted, you’ll then need to pay the full deposit and sign the contract of sale. Once the paperwork is done, the cooling-off period will start. You should use this time to get a building inspection completed to check the condition of the property. If anything comes out of this inspection that raises a few alarm bells, you may be able to withdraw from the sale and have your deposit refunded.
Next comes the settlement period. The seller will usually determine the settlement period, but you can always negotiate. Most settlements are around 4 to 6 weeks. At this time, your lender will pay off the balance of the property using your home loan and will also pay any stamp duty. You’ll then be handed the keys and get the green light to start moving into your new home.
Are you ready to become a homeowner right away? Or do you still want to learn more about how organising a first home buyer’s mortgage works? Well, no matter where your head is at right now, you’ll find the answers to all your basic first-time home buyer questions right here.
If you want to see how much you might be able to borrow, take a look at our loan calculator.
When choosing the right loan for you, one factor you will need to consider is whether the loan is variable or fixed. With a variable loan, your interest rate could go up or down in line with the cash rate set by the Reserve Bank of Australia (RBA). Fixed loans, on the other hand, remain set for a certain amount of time.
Find out more about the types of loans available to you.
It all depends on the lender. Every bank has its own set turnaround times that will impact how long it will take to process your application.
In a perfect world, the more you have to put down for a deposit, the better. But in reality, we know how tricky it can be to save up a big chunk of cash. That’s why things are a bit more flexible these days.
Generally, you’ll be looking at a 5 to 20 per cent deposit. There are some low deposit options out there, but it all depends on what’s going to work for you and your finances.
You don’t always need one, but it can be good to have one as a first-time home buyer. A guarantor is usually a parent or another family member who can act as extra security on your loan.
Simply put, it lets the bank know that someone else can take over your loan if you’re unable to keep up your payments. If your deposit is on the smaller side, a guarantor could be worth considering.
Just like with a guarantor, sometimes the bank needs a little extra assurance that you’re going to be able to pay back your loan. If your deposit is less than 20 per cent, you might have to pay Lenders Mortgage Insurance to cover your bank.
You may also be able to take out a Mortgage Protection Insurance policy, but that’s there to protect you as the borrower.
We’ve talked about stamp duty, but there can also be fees for mortgage registration, conveyancing, valuations, inspections and sometimes strata management.
If your head is spinning, there’s no need to worry. Our brokers can take you through it all. We promise it’s not as much as it sounds. Plus, as a first home buyer, the HBAA could help you out too.
Lenders will always consider your credit history. It gives them an idea of how likely you are to keep up with your repayments.
We can do a credit check for you to see where you stand. If you’ve slipped up in the past, we’ll see what we can do.
Let’s get you on the road to first home ownership. All it takes is a quick chat to see what we could do for you and then we can set up a meeting. Our team is in Perth and Fremantle, so we can always grab a coffee with you nearby.
Contact us online and we’ll get back to you within 24 hours, even on weekends. You won’t get a hard sell or constant follow up contact from us. We’re here for you only if you need us. It’s as simple as that.
