First Home Buyer

Buying your first home can be both exciting and stressful at the same time. What's worse is that everyone wants to give you advice based on their experience or what they think you should do.

Whilst they mean well, this often results in the complication of what should be an enjoyable and simple experience. The team at LFPG have years of experience in dealing with customers buying their first homes, and understand exactly what needs to be done and when.

To help you get started, here's a list terms you will need to be aware of.

First Home Owners Grant

If you have never owned a home before, you may be eligible for the First Home Owners Grant. This Grant is a one off payment, made available at settlement, which can be used to assist with the purchase of your first home. You may choose to use it towards additional expenses such as: - stamp duty or mortgage insurance. In some instances it may even be able to be used towards your deposit

Borrowing Capacity

All Banks have differing criteria that you will need to meet. How they assess your ability to repay your loan is known as your servicing capacity. As a result of this, the amount of money they will lend you is known as your borrowing capacity, or simply how much you can borrow.

Savings History

Given this is your first home, you will generally need to prove your ability to control your finances. The best way a lender can determine this is to check your savings history. Lenders generally like to see a structured approach to savings, over a period of time. Our consultants can talk to you about the best way to present your savings history to your prospective lender

Deposit

There are a whole range of ways for you to establish your deposit. You may have an excellent savings history, may be using the First Home Owners Grant, or you may have some assistance from family or friends. Whatever method you use to establish your deposit, the fact remains that the more deposit you have, the more money you will save over the life of your loan.

Stamp Duty

Stamp duty is a State Government imposed tax on both the purchase price of your property, and your loan. Rates vary between States, with reductions applicable to most first home buyers

Lenders Mortgage Insurance (LMI)

Lenders mortgage insurance is an insurance that protects lenders against borrowers defaulting on their loan. This insurance is paid as a lump sum up front, and generally applies on a sliding scale to loans with less than 20% deposit.

Additional Costs

There are a range of additional costs that may be applicable to you purchase. These may include:-

• conveyancing costs (your solicitors legal fee including title search, settlement fees etc)
• registration fees - government fees for the registration and transfer of your property title
• lenders application fees. These vary from lender to lender. At LFPG we have the capacity in some instances to have these waived due to the volume of business we write.

Helpful hints

• Use the First Home Owners Grant to cover your costs 
  
  


• Government concessions exist for First Home Buyers on Property and Mortgage Duty, potentially saving you thousands in purchase costs