Saving a Deposit Isn’t the Most Stressful Part in First Home Buying

How Much Deposit Do I Need?

In years gone by, banks used to offer 100% loans, but nowadays, these options are very rarely found. Many people come to find that if they have savings of around $15,000 to $25,000, they can usually proceed with talking to a mortgage broker or lender. This does require them to make up any difference which can be sustained by partnering up with a family member, or getting money as a gift from parents and having a family member to be a guarantor, if necessary.

Deposit

Great Tips:

  • Lower your Credit Card/Personal Loan Debt (including any store card debt)
  • Cut Down on Takeaway
  • Go out Less
  • Spend Less on Luxury Items
  • Cut Down Expenditure
  • Have a Budget and Stick to It (Income minus expenses)

The rule of thumb for the amount of deposit required was 20%, but now some finance organizations may, in fact, lend you 95% of the value of your home. That means you only need a 5% deposit for some areas. So, if you currently have a 5% deposit, this could be enough to sway lenders to finance the purchase of your home. Location and zoning will be factors here. Residential and country denote different requirements.

Example: If you had to find a deposit for a $300,000 property, you would only need to find $15,000. If you saved $1000 per month, then, in 15 months you would have your deposit! That seems possible if you have a real plan set in place.

If you have a sum which is larger than this 5%, it is more beneficial to you as it will reduce the risks to lenders – which means they will look more favorably on you. This is due to your LMI payment being substantially reduced. This LMI “Lenders Mortgage Insurance” is a one-time insurance payment that is required for any home buyers who have less than a 20% deposit to put down.
First Home Australia offers many house and land packages. Our professionals can also advise you on using the First Home Buyers grant as part of your deposit.

No Deposit

A few people have followed this route and have been able to purchase their first home with no deposit at all, although this does require a little forethought.
Around 60% of first home buyers have some form of assistance from their parents when purchasing their first home, this frequently comes in the shape of a guarantor loan and with this, you can usually ensure:

  • 110% of the property value can be borrowed.
  • LMI will be avoided.
  • Extra costs of stamp duty, mortgage set up costs and any legal fees will be covered.
  • Interest rates can be lower.

It is also possible to receive the deposit amount as a gift from your parents, although lenders can restrict some of the options available to you if this route is followed.

The professionals at First Home Australia can help you find the best solution to overcome the deposit dilemma, and you may just find that a simple solution requires much less than you thought. You can check with a broker or contact us and we can steer you in the right direction, too. If you are eligible for government grants then you won’t need to save as much for your deposit. Take the worry out, and call us!

How to Qualify for Queensland First Buyers Owners Grant

Until the end of December 2017, the First Home Owners grant remains at the current level of $20,000 for all eligible first time home buyers. One second after the stroke of midnight, this grant will be reduced to $15,000.

Double Incentives

You can benefit from two incentives when you are a first home buyer,the Government Grant of $20,000 until the end of December and then the Stamp Duty incentive which you may also be eligible for. This incentive can be against any home, either a new build or an existing home valued at up to $550,000. Note that the government grant is only valid for new constructions.

If you are eligible for both, this means you can receive a maximum of $28,750 towards your first home.

First Home Buyers Grant Qualification

To qualify for this, you must have:

Purchased a block of land, this must be done before a building contract is signed. It is this building contract which must be signed before midnight on December 30, 2017.

If you find you can receive this grant, you can use this as your deposit on a new home, and this can allow you to build or buy your new home much quicker.

The Rules for The First Home Buyers Grant

Type of Property – you must be building your own home or buying off plan. Purchasing a new home which has not yet been lived in. Or finally, a substantial renovation where the majority of the previous structure is knocked down.

Purchase Price – the purchase price of any property must be under $750,000, for the land and house combined.

Previous Property

This must be your first home and you must not have owned a property previously. If you are purchasing with your partner who has owned a property previously, you will not be able to receive the grant, but you may be able to receive the stamp duty concession.

Age and Citizenship

You must be an Australian Citizen who is 18 years of age or older. If you are with a partner, one of the applicants must be an Australian citizen or a permanent resident of Australia.

The application for the grant must be your first, it is not possible for you to apply more than once.

First Home Australia can help you fully understand all of the incentives on offer, and if you decide to choose one of the many properties which we have up for grabs in awesome locations, you may be eligible to receive a further bonus incentive of $10,000 from us as a first home buyer.

Add this to your $20,000 government grant and stamp duty and you can receive a total up to $38,750 towards your new home. Wow!

To take full advantage of the current grants and incentives, First Home Australia has many properties available, where we will pay your rental charges until your first home has been constructed. And many of these home and land packages are available in many prime locations throughout Queensland.

Call us today!

The Best Age to Buy Your First Home

The best age to buy your new home is when you can afford it comfortably, but, sometimes this is an unrealistic answer as there are many varying factors.

As a good example, back in the 1970’s the average age of first home buyers was 25 years, and by 2011 this had increased to 31 years of age. This trend also shows no signs of decreasing, as the ever-increasing land and property prices keep pushing the level of deposit required upwards.

Another report shows that between 2011 and 2015, first home buyers between the ages of 18 – 29 years of age decreased by almost 50%, yet, first homebuyers over the age of 40 increased by 50%, and first home buyers over the age of 50 increased by over 100%.

Save Earlier

It is much better to start saving at a younger age so your savings can build up to meet any increase that occurs by the time you are looking for your first home. A secondary benefit to saving much earlier is that you can establish a better credit rating as you get older.

Buy Smarter

A second alternative can be a much wiser and smarter way of buying your first home while you are younger, and this can be choosing to use the services of First Home Australia. Now, we currently have 1000s of home and land packages and properties for you to choose from, and many of these have super low deposits required.

If you feel you are at an age where you can afford your first home now, you should contact our professionals who can give you advice and see what your best options are for any savings you currently have towards your first home.

First Home Australia Bonuses

It is also worth acting now, even if you are in your younger years. If you can meet all of the requirements for the Government grant of $20,000 towards your first home, it’s really worthwhile. On top of this, if you are eligible First Home Australia, we offer a bonus incentive of $10,000 for clients along with a new Promotion in selected areas, where First Home Australia will pay your rental costs… all while your first home is being constructed!

Buying smarter with First Home Australia is a much better option for you now and any increase in house prices will actually work to your benefit in the coming years.

Call us today!

How to Get Good Clean Credit in Queensland

When applying for a loan there is nothing better than having a good credit rating. It sounds hard to believe, but there are many people who think they have a good rating when in fact they have a bad credit rating, and on some occasions, this can be merely a simple oversight.

Your Credit Report

You can find details of your credit report via a written application, the complete process for this will take around two weeks. If you require confirmation of what your credit report contains, you can pay a small fee and you will be able to access this information within 48 hours.

This credit report is used by lenders to see if you are a good candidate for being able to repay your debts. If you have a bad credit report, what can you do?

Credit Reports Can Contain Mistakes

This is the first step… your credit report can include mistakes that will only be noticed by you, so, it is therefore, important to carefully check all of your details, such as:

  • Personal Details
  • Mistaken Judgements and/or Defaults
  • Old Judgements and Defaults
  • Credit History Details

Debt Consolidation Loans

When you have varying loans with different interest rates, it can be difficult to meet these and impossible to manage. If you find you have a negative credit report, there is not much you can do. So, make sure this does not happen. Debt consolidation loans can combine all of your debts into one repayment, which actually comes with a lower interest rate than normal. When using this option, all of your current defaults will be wiped clean and you will be able to manage your debts much easier.

Direct Debits

Physically paying bills can be time-consuming and a nightmare to remember to do. There is an option where you can instruct your bank to make these payments automatically. Once you have set it up and given the instructions, the payments are automatically deducted from your account every month.

Add Positive Information

Certain information can be added to your credit report which can benefit you. Lenders look at extra information in a positive way. So, you’ll actually have a higher chance of obtaining credit. Certain facts like being married or being with the same employer for a period of two years can have a positive effect on your credit report. If you are in this situation you can contact the credit control companies and have this information added.

First Home Australia

A bad credit rating does not necessarily mean you can’t purchase your first home. If you are a first home buyer, and you are considering using the services of First Home Australia, don’t let this deter you.

We have professional finance experts who can help you with your credit situation and who can give excellent advice on the best way forward for you to move into your new home.

Image Source: kokomohomebuilders.org

First Time Buyer Full Turn Key Home QLD

Buying a home can be a daunting task, and if you are a first-time buyer, it can seem even worse. There are now solutions available which aim to make the whole process easier, these are known as full turnkey solutions. Although these solutions are provided by many developers, it is worth checking, as some have inclusions as standard that other developers regard as being extras.

Low Deposit

As you are dealing closely with a developer, they aim to make the decision to use this as attractive as is possible, and many offer low deposits or incentives should you decide to purchase with them for your full turn key home.

Many developers have broken the process down into simple steps which can make things much easier, although, it is not guaranteed everyone will be eligible depending on their requirements.

Step 1 – Pre-Approval

Pre-Qualification Process – This normally deals with your financial standing and background, it may also include pre-tax earnings which need to be over a certain limit, and if you have been renting, how good is your rental history for the previous twelve months? Make it good.

The developers will normally have a choice of brokers available who can find a suitable mortgage, and they may not charge any penalties or higher rates if your deposit is low. At this point, you will also find the maximum amount that you can borrow. It is at this point, that your annual pre-tax earnings come into play.

Step 2 – Finding Land

If you have been pre-approved, now is the time for you to find that dream vacant lot of land in the community where you wish to live, and you may find some developers have dedicated teams of professionals who can help you with this step, and they will have enough knowledge to help you avoid paying more than you should when buying land.

Step 3 – Choosing Your Home

Many developers have various designs with which you can choose from, these can include multiple interior designs and colour choices.

You may find some developers include air conditioning, screens for the windows, stainless steel appliances and a high degree of energy efficiency. As for the exterior, landscaping may be included, with driveways, external concrete areas, termite barriers, and lawns.

These full, turn-key solutions can be a great alternative, especially if you are unsure of how to go it alone, asthey provide a lot of hand-holding, and aim to make things much simpler, but at the end of the day, the choice is still yours. There are many companies who provide these solutions, so a little research to find the best one which meets your needs is highly advisable.

Image: Metricon.com.au

Stop Renting in Queensland

This debate has been around for many years, and it will probably be around for many more years to come. Is it better to buy a house or is it better to rent? There are upsides and downsides to both options but for the long term, buying is way out in front as the best option for most.

Queensland has a lot more suburbs where it is cheaper to buy than to rent than any other state. In 2012, there were 147 locations where buying your own home was cheaper than renting, yet many of these were in the more regional areas rather than towards the suburban areas.

What should also be taken into consideration along with these cheaper prices, is the incentives offered by the government for first-home buyers which equate to $20,000 at present, but from July 1, 2017, this drops to $15,000 which can be available to first-time buyers of new homes under the current law.

As the cost of buying a home continues to increase, especially in inner city locations or close to the city, renting can make economic sense for sporadic workers, because there is also the consideration of flexibility, and once your lease is up, you are free to re-locate if you so wish. But if you know where you want to live this is not so good.

You also have to consider the maintenance, repairs and home insurance bills that will be the responsibility of you if you should choose to buy rather than rent. But compared to moving from rental to rental, they equal each other out.

When you look at renting thoroughly, it does also have its downfalls and disadvantages, and one of the main ones being, have you grown attached to the home you are living in? For many, this is not a problem, but there are some who grow fond of where they live and like to hold onto those memories.

To see the other disadvantages, you should look at it from the landlord’s point of view. For the most part, you have no say in what happens to the property, or how long they will let you remain, apart from the length of your current rental contract.

There is also the possibility that if the landlord falls on hard times and has to sell, this can leave you in a situation where you have to find somewhere else to live.

It is easy to see why buying your own home is a better option once you consider all of the options, and this is something you should do, no matter whether you are buying or renting. Over time, you should gain an advantage in the value of your home when you buy, even if renting is cheaper for periods of time.

Tips To Help You Buying First Home

Buying your first property can be an overwhelming process. First time borrowers can face uncertainty over how to apply for a home loan, how to get approved, the grants they might be eligible for and where they should look to buy. On top of that, the home buying process can be filled with steps you never knew existed and jargon you’ve never heard before.

Plan your budget.

Budgeting give you control over your finances and it is one of the surest ways to achieve your savings goal. You need to be focused on what you really need instead of what you want.  There is nothing more important when contemplating buying your first home than planning a workable budget and sticking to it.

Know your limits

Whatever you do, do not buy what you can’t afford. “Don’t look at buying your ideal home for your first home,” says Michael Yardney, founder of propertyupdate.com.au.

“Be prepared to sacrifice on location or quality a bit and use this first property as your stepping stone to buying a better house down the line.”

Save for the deposit

It will help you in two ways. First, it will show your potential lender that you can exercise financial discipline over a period of time. Secondly, the bigger the deposit the larger the equity you have in your property right from the start.

Get into good habits early

The sooner you get into the routine of taking money from your wages before you spend it, the better. Do not make the mistake of applying for your first home loan while you are carrying excessive debt. Make your home loan your top priority.

First Home Owners Grant

Being a first time buyer you may be eligible for some extra help from the Government, depending on the property you’re buying and the state or territory where your new home is located. If you’re eligible, ask your home loan provider to organise the First Home Owners Grant paperwork for you, alongside the home loan. The most appropriate time to apply for the First Home Owner Grant is at the same time you apply for your home loan.