November 30, 2015
Buying a first home is often one of the largest financial decisions most Newcastle & Lake Macquarie people will make. Needless to say, saving a deposit for such an investment is a top priority when looking to enter the property market.
First home buyer, wondering if you have enough to get started. Contact me today on 0413 245 556 or click online enquiry to discuss.
As a first homebuyer, you may be eligible to apply for government assistance, such as the First Home Owner Grant (New Homes) scheme.
The First Home – New Home scheme may also see eligible first home buyers be exempt from transfer duty on new homes valued up to $550,000, and allow concessions for new homes valued between $550,000 and $650,000. For those first home buyers purchasing a vacant block of residential land to build their home will pay no duty on vacant land valued up to $350,000, and will receive concessions for vacant land valued between $350,000 and $450,000.
A grant and/or duty concession will no doubt be welcomed, but it’s important to remember that you will still need to save a minimum deposit of at least 5% of the property purchase price.
How we can help you
In most cases lenders require a certain percentage of your contribution to be made up of genuine savings, accumulated over a period of time. Some lenders may also consider rental payments as savings evidence, but there may be conditions attached, so do your research.
First time homebuyers might also ask for help from their family, who can guarantee the loan by using the equity in their own property as security. While this won’t put you steps ahead with building your loan deposit, the guarantor will help you bridge the deposit gap and may help you avoid paying costly lenders’ mortgage insurance, which applies if your deposit is less than 20% of the purchase price. Keep in mind you still must be able to repay the loan on your own and it’s a good idea to seek legal advice to ensure all parties are aware of their rights and responsibilities.
Ultimately, the more money that you have to contribute towards your deposit, the less money you will have to borrow and repay with interest. So be sure you stick to your budget and make savings wherever possible. Loan pre approval is an important first step in the process.
When it comes to assessing your ability to borrow funds to buy your dream home, lenders will take into account your deposit and a range of information about your financial history and current financial situation. This will likely include an assessment of your current income, living expenses, assets and liabilities such as credit card debt and other loans.