Becoming a first time home owner is an exciting time but it can also be a little daunting, you can feel like there’s so much to know, especially regarding home loans – how much can you borrow, can I afford my living costs, what government grants am I entitled to? This is where having a member of our team at Finance Empire guiding you through the process, will give you peace of mind and a seamless, stress free experience.
Buying a home can be confusing with so much information to absorb. We provide an overview of the important information regarding home loans.
When you apply for a home loan, you borrow a specific amount of money from a lender to purchase a property. The amount you can borrow depends on various factors, including your income, expenses, credit history, and the value of the property.
Home loans typically come with either a variable interest rate or a fixed interest rate, or a combination of both. A variable rate can change over time, while a fixed rate remains the same for a predetermined period. The interest rate determines the amount of interest you’ll pay on the loan.
Owner Occupier Home loans, that’s where the owner lives in the property, are usually repaid in regular instalments over an agreed loan term, which is often 25 to 30 years. Each repayment includes both principal (the amount borrowed) and interest (the cost of borrowing). The frequency of repayments can usually be monthly, fortnightly, or weekly.
The loan term is the length of time you have to repay the loan in full. Shorter loan terms typically result in higher monthly repayments but lower overall interest costs. Longer loan terms can lower monthly repayments but result in more interest paid over the life of the loan.
When purchasing a property, most lenders in Australia require a deposit. The deposit is a percentage of the property’s purchase price and serves as an upfront payment. Generally, a deposit of 20% of the property’s value is recommended to avoid paying lender’s mortgage insurance (LMI), although a lender may lend up to 95% of the property’s value, which would mean the borrower would only have to have a 5% deposit.
If you have a deposit of less than 20% of the property’s value, you may need to pay LMI. LMI is a type of insurance that protects the lender if you default on the loan. The cost of LMI is typically added to your loan amount.
When taking out a home loan, you should also consider additional costs such as application fees, valuation fees, legal fees, and ongoing fees charged by the lender. These costs can vary depending on the lender and loan product.
It’s important to note that home loan products and features can vary among lenders, so it’s advisable to research and compare different options to find the most suitable loan for your needs. Additionally, seeking advice from a mortgage broker or financial professional can provide valuable guidance tailored to your specific circumstances.
Disclaimer:
Please keep in mind that the information provided here is a general overview, and it’s always recommended to consult with a mortgage professional for specific details and advice regarding home loans in Australia.
As Mortgage brokers, we help potential borrowers like yourself, arrange finance in Australia. We like to meet with you prior to you looking for your first home so we can discuss how much deposit you will need, if you need to pay mortgage insurance, lender time frames, the loan process, settlement details and answer any questions you may have. These services are generally free and our professional team has the latest knowledge of the most competitive loans, offers and government grants in the market.
Once you’ve found the property you would like to purchase, we have access to hundreds of products from a wide range of lenders available that best suit your property goals. We assist you with all current first home buyer schemes, benefits and exemptions to help you get into the housing market with as little as 5% deposit or 2% for single parents and we keep you up to date and informed every step of the way.
The Regional First Home Buyers Guarantee (RFHBG) is designed to help eligible home buyers purchase their first home sooner in regional areas of Australia. Part of the Home Guarantee Scheme (HGS), this Australian Government initiative is administered by Housing Australia.
The RFHBG supports eligible regional home buyers by guaranteeing part of their home loan from a Participating Lender. This allows buyers to purchase a home with as little as a 5% deposit without the need for Lenders Mortgage Insurance. The guarantee covers up to 15% of the property’s value (as assessed by the Participating Lender), but it is not a cash payment or deposit.
From 1 July 2023 to 30 June 2024, there are 10,000 RFHBG places available.
To qualify for the RFHBG, applicants must meet the following requirements:
Applicant Status:
Apply as an individual or joint applicants.
Citizenship/Residency:
Be an Australian citizen or permanent resident* at the time of loan application.
Age:
Be at least 18 years old.
Income:
Earn up to $125,000 for individuals or $200,000 for joint applicants, as evidenced by the Australian Taxation Office Notice of Assessment.
Occupancy:
Intend to live in the purchased property as owner-occupiers.
Property Ownership History:
Have not previously owned or had an interest in real property in Australia (including land) in the last ten years before the loan execution date
Buying your first home is a significant step, and it’s perfectly natural to feel a mix of excitement and apprehension. But fear not, because you’re not alone in this journey, and there are numerous assistance programs tailored specifically for first home buyers like yourself.
Let’s delve into some of these programs:
Are you a first home buyer? You could be eligible for a $10,000 First Home Owner Grant (FHOG) when you buy or build your first new home in Australia. Here’s what you need to know:
What Types of Homes Qualify?
Your first new home can be:
These must be newly built, purchased off the plan, or substantially renovated. The grant is not available for established homes.
Spending Limits
Newly Built Homes: The purchase price must not exceed $600,000.
Vacant Land and Building Contract: If you buy vacant land and sign a building contract, the combined cost of the land, building contract, and any variations must not exceed $750,000.
Substantially Renovated Homes: If you buy a substantially renovated home, the purchase price must not exceed $600,000.
Eligibility Criteria for Substantially Renovated Homes
You may qualify for the grant if:
Note: A property is not considered a new home if the builder or previous owner lived in it, leased it out, or used it for short-term accommodation.
Additional Benefits
The First Home Owner Grant can be combined with other exemptions or concessions available to eligible homebuyers, enhancing your savings and making your first home purchase more affordable.
For more details and assistance with the application process, contact us today. We’re here to help you take the first step towards owning your new home.
For more information:
The First Home Buyer Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative aimed at helping eligible home buyers purchase a home sooner. Administered by Housing Australia, the FHBG provides significant support by guaranteeing part of an eligible home buyer’s home loan, allowing them to buy a home with as little as a 5% deposit without paying Lenders Mortgage Insurance.
How Does the FHBG Work?
Under the FHBG, Housing Australia guarantees up to 15% of the property value (as assessed by a Participating Lender). This guarantee is not a cash payment or a deposit; it simply reduces the required deposit amount and eliminates the need for Lenders Mortgage Insurance.
Availability
For the period from 1 July 2023 to 30 June 2024, there are 35,000 FHBG places available.
Eligibility Criteria:
To qualify for the FHBG, home buyers must meet the following criteria:
Deposit Requirements
Home buyers need to save between 5% and 20% of the property’s value as a deposit. While the minimum required for the FHBG is 5%, individual financial circumstances may require a higher deposit as determined by Participating Lenders.
Participating Lenders will assess if the deposit qualifies as genuine savings. Additionally, confirm whether any cash grants from other Australian Government, State, or Territory programs can be included as part of the genuine savings.
Additional Costs
Eligible home buyers are responsible for all associated costs and repayments, including but not limited to:
Property Types and Price Caps
Under the HGS, eligible properties include:
For personalised advice and to discuss your specific situation, contact us today. We can provide detailed information and help you navigate the application process for the First Home Buyers Guarantee.
For current up to date information click on the link below as details contained on our site may not be current at time of viewing.
For more information: https://www.housingaustralia.gov.au/support-buy-home/first-home-guarantee
Are you a first home buyer? You could be eligible for a $10,000 First Home Owner Grant (FHOG) when you buy or build your first new home in Australia. Here’s what you need to know:
What Types of Homes Qualify?
Your first new home can be:
These must be newly built, purchased off the plan, or substantially renovated. The grant is not available for established homes.
Spending Limits
Newly Built Homes: The purchase price must not exceed $600,000.
Vacant Land and Building Contract: If you buy vacant land and sign a building contract, the combined cost of the land, building contract, and any variations must not exceed $750,000.
Substantially Renovated Homes: If you buy a substantially renovated home, the purchase price must not exceed $600,000.
Eligibility Criteria for Substantially Renovated Homes
You may qualify for the grant if:
Note: A property is not considered a new home if the builder or previous owner lived in it, leased it out, or used it for short-term accommodation.
Additional Benefits
The First Home Owner Grant can be combined with other exemptions or concessions available to eligible homebuyers, enhancing your savings and making your first home purchase more affordable.
For more details and assistance with the application process, contact us today. We’re here to help you take the first step towards owning your new home.
For more information:
We want you to help you achieve your finance goals whether it is getting you into a new home or assisting with a investment property.
Here’s the process on how we get your home loan approved quickly.
Chat with us to discuss your specific financial goals and dreams.
We work hard to present to you the best solution, lender and interest rate based off our initial discovery call.
We will help you complete all the necessary paperwork and requirements with your chosen lender to get your application sorted.
We will monitor your application and keep in touch along the way. We work behind the scenes to make sure everything is as smooth for you as possible.
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