FIRST HOME BUYER LOANS
BUYING YOUR FIRST HOME?
Here’s everything you need to know.
We cover the savings you need, a breakdown of the First Home Loan Schemes available, the process, and share a video of the risks to be aware of as a first home buyer.
If this is your first time looking to buy a home, then this guide is for you!
1. How much do I need to have saved?
Are you saving for a deposit? As a First Home Buyer you can proceed today with as little as 5% of the purchase price saved, without paying Lenders Mortgage Insurance (LMI).
To ensure you are in a position to complete the purchase though with other associated costs you will generally need at least 6-9% of the purchase price before you go out and start looking to purchase.
Here’s how to get this saving process started, or fast-tracked even, to get your first home sooner.
2. First home owner grants and schemes available
Home Guarantee Scheme (Federal)
a. First Home Guarantee
b. Family Home Guarantee
c. Regional First Home Buyer Guarantee
The Australian States and our Federal Government have a range of initiatives to help eligible first home buyers purchase property sooner. These initiatives provide financial assistance and support, to help with the upfront costs & get first home buyers into the market sooner.
Worth noting is there is a limited number of spots in these schemes.
3. Have your circumstances assessed and understand options
Once you have some savings sorted, the next step is to understand what you may be able to borrow and which schemes of those above you will qualify for and how to access them.
Enter the mortgage broker.
As mortgage brokers we have access to a wide range of lenders with differing policies and products. We can help you understand which lender is most likely to approve you for a loan that matches your priorities and needs.
For example:
Not all lenders can provide you with a loan that provides access to the First Home Buyer Guarantee Scheme (FHBGS)
Some lenders may provide you with an LMI waiver due to your profession
If you are self employed there are multiple methods of assessing your income and each lender differs in what they deem acceptable
Under this step as the broker will need to collect a number of documents and pieces of information from yourself so we can complete an in house assessment. This will allow us to consider all of the above plus more to assist you in your home buying journey.
If you believe you are ready for this step or want to find out more click here to arrange a time to speak with one of our trusted team members at Black and White Finance.
TO UNDERSTAND YOUR OPTIONS, START TODAY
4. Obtain your Pre Approval
Once you have spoken with our trusted team and we have completed an assessment of your circumstances we will arrange a meeting with you to discuss your options before finalising a singular lender to proceed with for pre-approval.
We will then provide you with a proposal and application to sign for the chosen lender before lodging for the lender to complete their own assessment and issue you with a pre-approval.
**A pre-approval means the bank has reviewed your circumstances against their credit policy and are comfortable to lend you your pre-approved amount subject to you purchasing a suitable security property – giving you the confidence to go out and start the house hunting journey.
FIRST HOME BUYER TIPS AND RISKS TO BE AWARE OF:
In this short video, we provide 10 tips to be aware of when you're looking to buy your first home
5. Begin the Property Hunt
Congratulations! You have reached the fun (sometimes daunting) part of the journey.
You now hold your pre-approval, you know what your limits are in purchase price and loan size and can start seriously looking at properties to make offers and attend auctions. Once you have found a property you like and want to pursue further you reach stage 6!
** Once at this and future stages you are not alone – we at Black and White Finance are here to help guide you and answer any questions you may have throughout the property search.
6. Complete your due diligence and make an offer/attend auction
You have now reached the serious stage of your first home buying journey – you have inspected a home which you like (possibly even love) and want to try and purchase it.
Depending on the state you are located there are numerous ways of purchasing property.
The two main methods though are; you make a formal offer to the real estate agent for the vendor to accept or you attend an auction and are the winning bidder.
Depending on how you plan to buy the property (under cooling off or without a cooling off period) will determine when you need to complete your due diligence by, however with all property purchases it is prudent to ensure you:
Have the Contract of Sale reviewed by a solicitor / conveyancer to ensure there is nothing untoward you as the purchaser
Obtain and review the strata report if it’s an Apartment/Unit you are purchasing
Consider if you need to get a pest and building report completed (most likely if you are purchasing a standalone house)
Speak with us as your mortgage broker to ensure the property will be acceptable to the bank you are pre-approved with
We can help guide you through this process with offer templates and with when you should be completing the above.
7. Offer acceptance and conversion to formal approval
Pop the champagne!
Your offer has been accepted or you won at Auction.
You are officially in the final stages of your home buying journey and have signed the contract of sale and paid your deposit.
**A deposit can range from 0.25% if under cooling off to 5% or 10% depending on what you may negotiate pre-offer / auction.
We can now proceed with ordering a bank valuation, finalise the loan amount and request the bank convert our pre-approval to formal approval.
Once formally approved the lender will issue out loan contracts and documents for signing which we will guide you through before preparing for settlement.
8. Settlement
Once we have signed the loan documents, the bank will verify these and start preparing for settlement.
There are a couple of things you will need to organise such as placing the remaining funds required for settlement into the nominated shortfall bank account prior to settlement and arrange a pre-settlement inspection of the property.
Its then a waiting game for settlement day where the lender, your solicitor and the vendors solicitor and lender (if applicable) will all complete settlement generally via a system called PEXA however in the odd occasion it may be in a physical location. Either way you shouldn’t be required to do anything on the day until it settles and its time to collect the keys!
To start your first home owner journey
hit the ‘start today’ button below.
We can’t wait to meet you and help you with your loan.
When helping you with your loan, we want you to know:
1. Data integrity and your privacy is very important to us, so we use encrypted platforms + two-factor authentication methods to keep your financial information safe.
2. When finding the best possible deal for you, we’re accessing 30+ lenders.
3. Your experience is most important and jargon has no place for us here so when we’re helping you, it will be done with full transparency, empathy, and care.