Buying your first property is an exciting time!!! There is so much to think about!!
How much deposit do I need? How much will the bank lend me?
What will my repayments be? Which bank has the best loan?
Should I buy a house “for sale” or at auction? Do I have to pay Stamp Duty?
Are there any Government Grants available to me?
These are just a few questions that you may be thinking about. I would like to share some valuable steps to help you through the process.
Step 1 – Review your budget
The first and most important step in the process is to sit down and look at your budget. How much can you afford in repayments? If you are currently paying rent how much extra can you afford to put towards a mortgage. What are you willing to sacrifice to help your mortgage repayments? Would you stop buying lunch each day? Spend less on entertainment or clothes? Do you want to maintain your current lifestyle?
Step 2 – Speak to a Mortgage Broker
When you have established what you think you can afford you should speak to a Brisbane Mortgage Broker to establish what the banks will lend you and work out the best solution for your needs. All the bank and building societies have different interest rates, products and policies. A Mortgage Broker can do all the leg work for you. They will ask you a lot of questions to understand your needs and then give you a recommendation based on the best solution for your needs.
Generally you will need a minimum 5% deposit plus costs. The costs associated with purchasing a residential property, including stamp duty and legal fees, are usually about 5% of the purchase price. As an example if a property is $500,000 to buy, you should budget on needing at least $50,000 in your savings ($25,000 deposit plus $25,000 for purchase costs).
A mortgage broker can also talk to you about options for first-home buyers like a guarantor loan or perhaps the use of gifted funds, which could mean a first-home buyer could purchase with no deposit at all.
Once you work out the best lender for you the Mortgage Broker can arrange a Pre-Approval with the bank. Once you have a pre-approval the fun starts and you can start shopping!!
Step 3 – Are you entitled to any Government grants?
The First Home Owner Grant (FHOG) is a government scheme that was introduced in 2000 to offset the effect of Goods and Services Tax (GST) on buying or building a home.
It is a one-off payment for eligible first home buyers who purchase or build a residential property to live in.
How Does It Work?
The grant amount, eligibility criteria and payment details of First Home Owner Grants vary between states and territories, so it’s important to check with your home lender when you apply for a home loan. Usually, you may be eligible if you:
Are a permanent resident or citizen of Australia
Have never received the grant or owned residential property
Are the minimum age set by your state or territory
Are buying a new or established home as an individual (not a company or trust)
Will live in the residence for the minimum time determined by your state or territory (the grant is not available on investment properties). The grant is usually paid at the time of settlement to your bank and applied directly to your home loan. If you are building a home, the grant will be approved when your first loan repayment is due.
Some state and territories have additional grants for first home buyers who purchase or build a home, especially in regional areas.
Step 4 – Start house hunting
You may want to start looking online at domain.com.au and realestate.com.au to see what you want. Are you looking for a house or a unit? Do you want to renovate? Don’t forget if you are renovating you will need to allow extra in your budget. You can then attend an “open home” to look at the properties on your short list. Once you have found the property you can make an offer!! Prior to making the offer there are some steps to follow.
Steps To Success
- Review the contract – Find yourself a Solicitor or Conveyancer to review the contract. Understand what inclusions are in the contract and get advice.
- Make an offer – The Real Estate Agent will ask you to put your offer in writing.
- Start negotiations – The Real Estate Agent will present your offer to the Vendor and negotiate between both parties and potentially other interested purchasers. It is a good idea to ask the agent if anyone else has put forward an offer.
- Exchange contracts – Once you have agreed on a price your Solicitor will help you exchange contracts. You will also have to pay a deposit on the property at this stage.
- Cooling-off period – In most states, there is usually a cooling-off period after contracts are exchanged, unless you buy a residential property at auction. During the cooling-off period, you can cancel the contract but you may lose your deposit. It’s important to check with your solicitor or conveyancer about whether a cooling-off period applies to your contract before you sign.
- Settlement – Generally it is around four to six weeks. This is when you pay the balance of the property using your home loan, including Stamp Duty. You’ll then receive the keys to your new home!!!!
We would love to assist you in this exciting journey!! Visit our Website for more information