First Home Buyer Loans

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Discovering Your First Home Buyer Loan

This is a loan that is given to a borrower who has never purchased a property before. This loan is universal as we have all experienced this stage of the finance highway of life.

What is typical when you’re at this stage and looking to get a home loan to buy your first home? As the statistics bear out, only 5% of us in this first home-buyer stage actually have all of the capital required to purchase the property outright. This page is not for you as this applies to the other 95% of us looking to get their first home.

Essentials for a First Home Loan:

Pre-Approval, Deposits & Loan Repayments

Before diving into the home buyer loan market, arm yourself with the necessary knowledge. Understand the key components of a first home buyer loan, from deposits and interest rates to the benefits of pre-approval.

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Pre-Approval and Deposits: Your First Steps

Before house hunting, it’s vital to secure a deposit and get pre-approval for your home loan. This not only strengthens your borrowing power but also gives you confidence in knowing your loan limit.

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Repayment and Interest Rate Considerations

Choosing the right interest rate and repayment plan is essential. Understand the difference between fixed and variable rates, how they influence your loan repayments, and the importance of a repayment plan that aligns with your financial situation.

What To Look For In a First-Time Loan?

Don’t just take the first loan that comes your way! You’re leaving money on the table if you do this. Take advantage of what’s out there to help you, the internet in particular can be a gigantic help! There are comparison websites such as ours out there to shop around and get the best possible deal for yourself. One of the first things you should do is to check your Equifax credit score to get a rough idea of your creditworthiness.

This score will also give you a glimpse into what kind of lending rates that you may be offered on your loan. You can use our site to provide you a list of all current loans and rates throughout Australia.

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Interest Rate Comparisons

Interest is one of the biggest money makers for lending institutions and banks. It’s easy to see why when you run the numbers on a 30-year note and see how much interest in total is paid out. This is why interest rates are so important for a home loan as every percentage point counts in terms of interest payments. The difference between a 7% APR and a 8% APR over 30 years could mean thousands of dollars in interest accrued. You can use our site’s many financial tools to help you in your search for your first loan. We have a useful mortgage calculator which can show you how much your monthly payments will be with the data provided. This data comes in the form of principal of the loan, credit score, how long the loan will be.

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Loan Feature Comparison

You can compare a litany of features that are applicable to your own financial situation and apply these parameters to your loan search. These parameters include:

Customer Service
Portability
Offset account
Ability for additional repayments
Interest rates
Redraw facility
Loan & lender fees
Top up facility
Split loan facility

You can ask us to show and compare your full range of loan options available as first time home buyer.

What Are First Home Owner Grants (FHOG)?

There are a few schemes and government grants that are available to first-home buyers. These grants can reduce the cost of your property and the principal needed for the loan. Some of these grants include:

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FHOG – First Home Owners Grant: This is a one-off grant for first-home buyers for purchasing or building their first home.

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Stamp duty concession or exemption: Stamp duty is exempt for first home buyers up to a certain price cap. The cap depends on the state that the property is purchased in and whether the home is new or already established.

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FHLDS – First Home Loan Deposit Scheme: This allows first-home buyers to purchase a home with 5-20% deposit while being exempt of Lenders Mortgage Insurance premiums.

We can compare all of the loan options available to you as a first-home buyer! If you have questions, contact us and let us help you today!

Understanding the First Home Buyer Loan Process

Navigating the journey of securing your first home buyer loan can be complex. Let’s simplify it with the following steps:

Step 1

Assess Your Readiness to Buy Your First Home

Before diving into loan applications, evaluate your financial readiness. Consider your savings for a deposit, your borrowing power, current financial commitments, and your ability to make regular loan repayments.

Step 2

Getting Pre-Approval for Your Home Loan

A pre-approval from a lender gives you a clear idea of how much you can borrow and shows sellers and real estate agents that you’re a serious buyer. Note that pre-approval is not a final loan approval but rather an indication of your potential borrowing capacity.

Step 3

Understand the First Home Buyer Grants and Concessions

Take advantage of first home buyer grants and concessions such as the First Home Owner Grant (FHOG), stamp duty concessions, and the First Home Loan Deposit Scheme (FHLDS). These can significantly reduce your upfront and ongoing costs.

Step 4

Research and Compare Home Loans

Different lenders offer various types of home loans, each with unique features, interest rates (fixed rate or variable rate), and fees. Utilise home loan calculators and comparison rate tools to help find a loan that suits your needs.

Step 5

Submit Your Home Loan Application

Once you’ve found the right loan and lender, it’s time to submit your loan application. You’ll need to provide details about your finances, employment, and the property you intend to buy.

Step 6

Understand Lenders Mortgage Insurance (LMI)

If your deposit is less than 20% of the property’s value, you may have to pay Lenders Mortgage Insurance (LMI). This is a one-time fee that protects your lender in case you default on your loan.

Step 7

Home Loan Approval and Settlement

After your loan is approved, your lender will send you a loan contract to sign and return. Your lender or conveyancer will then organise settlement with the seller’s legal representative. After settlement, you’ll be the official owner of your first home!

Zanda Wealth Mortgage Brokers is Here to Help First Home Buyers!

Navigating the home loan process as a first home buyer? Zanda Wealth Mortgage Brokers is here to guide you! Contact us today for a free consultation with our home loan specialists, and let’s take the first step towards your dream home.

Locations We Serve

Sydney

Brisbane

Gold Coast

Melbourne

Adelaide

Perth

Canberra

Darwin

Hobart

Launceston

When it Comes to First Home Buyer Home Loans Consider the Following:

How Stamp Duty Affects Your Home Buying Process

Stamp duty is a significant cost that first home buyers must consider. It’s a tax levied by state governments on property purchases. The amount varies based on the property’s purchase price, location, and type. First home buyers might be eligible for stamp duty concessions or exemptions, making it easier to buy your first home. To estimate the amount, you can use online stamp duty calculators. This additional cost can affect your borrowing power and the size of your home loan.

The Impact of Lenders' Mortgage Insurance on Your Home Buyer Loan

Lenders Mortgage Insurance (LMI) is a one-time fee charged by lenders when your deposit is less than 20% of the property value. It protects lenders against potential loss if you default on your home loan repayments. As a first home buyer, understanding the concept of LMI is crucial as it can significantly affect your home loan size and repayments. Some first home buyer home loan schemes might offer ways around paying LMI, so exploring these can be worthwhile.

Understanding Loan-to-Value Ratio (LVR) and its Impact on Your Loan

The Loan to Value Ratio (LVR) is a measure of the amount you’re borrowing compared to the property’s value. It’s crucial in determining your borrowing power, your home loan interest rates, and whether you’ll need to pay Lenders Mortgage Insurance. A lower LVR typically means lower risk for the lender, potentially leading to more favourable loan terms. First home buyers should aim for a lower LVR to reduce costs associated with their home buyer loan.

Fixed Rate Vs. Variable Rate: Choosing the Right Option

When selecting your first home buyer loan, you’ll have to choose between a fixed rate and variable rate. A fixed rate offers certainty with the same interest rate for a set period, ensuring stable repayments. A variable rate, however, can rise or fall with market changes, affecting your repayment amounts. Your decision should align with your financial situation, risk appetite, and market predictions. Home loan calculators can help you evaluate the impact of each option on your loan repayments.

Calculating Repayments and Comparing Rates with Home Loan Calculators

Home loan calculators are handy tools that can help first home buyers estimate and compare repayments under different interest rates, loan terms, and loan amounts. By inputting details of your desired loan and property price, you can get an idea of how much your regular repayments might be. Comparing different home loans and interest rates using these calculators can help you find the best home loan for your situation. Be sure to factor in both the principal and interest repayments, as well as any potential fees and charges associated with the loan.

Looking to Buy Your First Home?

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