Loan Tips for First Home Buyers
Buying a home is both exciting and stressful, especially for first home buyers, so when I met Tim from Mainly Mortgages who told me he especially likes assisting first home buyer’s prepare for their loan I asked him to share his expertise. Here are some tips to get you started;
- Start early – If you intend to acquire your property with a mortgage, save for as large a deposit as possible. Some lenders will lend 95% of the purchase price. If you do not have the required deposit, members of your family may be able to pledge a property they own as security, to cover your deposit. Reduce personal debt by as much as possible so that you present as an attractive credit risk!
- Be realistic – Your first home will not be your last. Select a home you can afford and yes, this may mean not being able start out in your desired suburb. Limit mortgage re-payments to no more than a third of your gross salary (or your combined salaries). Ensure that you have additional funds for legal fees, normally about $1200. First time homebuyers pay no stamp duty for property purchases of $600,000 or less and discounted stamp duty for properties between $600,000 & $750,000.
- Get correct advice – Good advice, tailored to your needs is key to ensure that you do not miss an opportunity because your lender says you do not qualify for a loan. Each credit provider has their unique credit policy and, what works with one lender may not work with another. Most home loans are arranged by accredited mortgage advisers/brokers, who will conduct a thorough analysis of your needs and recommend the correct loan for you.
- Cover your risks – Have a qualified conveyancer review your Section 32 document before you commit to purchasing the property. Also, have a builder look over the property, particularly if it requires some work, to provide a realistic estimate of what it will cost to do the repairs. Builders see things that ordinary people do not! Invest in a pest inspection, particularly if you are purchasing an older property.
- Enjoy the process – Plan well and have fun! This is likely the largest purchase you will make.
Tim Cranna is accredited by ASIC as a Credit Representative No 499339. He is a director of Mainly Mortgages Pty Ltd and specialises in advising First Time Homebuyers. He can be reached at firstname.lastname@example.org or at 0438 058 236.
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