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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.

Don't be worried about the number of things to consider ...that's where we come in.

Our service at Solutions costs you nothing and we provide top quality professional assistance the whole way through the entire process.

We'll explain to you how much government grants and Stamp duty concessions for certain properties can save you. The amount of savings depends on the type of property and the amount that you are spending. As a first home buyer, items you should consider :

  • The First Home Owners Grant
  • Stamp Duty Exemption schemes ( available in certain locations)
  • 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 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.

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 higher mortgage insurance premiums but the decreased requirement for a deposit is attractive to some people.

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 dependent 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.