First Home Buyers

If you are a first home buyer who does not know where to start, let us guide you with information about financing your first home.

First home buyers may find certain aspects of purchasing their first home a bit daunting but keep in mind with the professional guidance of a mortgage broker can make the entire process that much easier.

Being a first home buyer the first and most vital step you need to take before you start looking for your dream home is to contact Jeff at Homeloans Plus, Jeff will carefully go over your finances to see just how much you can afford to service a mortgage. 

As a first home buyer having a 20% deposit to buy your first home is not always possible, if you do have a large deposit that is great because you will have access to loan products with lower repayments and better rates.

However not everybody is able to come up with such a large deposit to buy their first home.
If you do not have a large deposit here are some ways to get a home loan to buy your first home.

A guarantor is someone with an existing property who provides additional security for your home loan.

The guarantor is usually a close relative (Mum and Dad) who uses the equity in their own property as security for your first home buyers loan. 

A guarantor loan can also be used to avoid paying lenders mortgage insurance. 

A gifted fund is another option for first home buyers to get into the property market. A gifted fund can be from an immediate family member or extended family member. 

Usually, the lender will request a gift letter stating that the funds have been gifted to you unconditionally and without expectation of repayment. 

If you do decide to use gifted funds as part of your deposit the lender would still like to see that you can discipline yourself to keep up to date with your loan repayments, so they may ask for evidence of 5% genuine savings and your rental history.   

Proving to a lender that you have a regular savings plan is another thing to keep in mind when applying for your first home. 

If you want to borrow 90% or more of a property value, you will need to show the lender that you have a least 5% of the property’s value in genuine savings.
  

Lenders consider the following as genuine savings

• Savings held in a bank account in your name over a 3 month period
• Term deposit held for a period of 3 months or more
• Shares or managed funds held for a period of 3 months or more
• Up to date rental history over 6 months from a licensed rental agency
   

The first home guarantee is a scheme designed to assist first home buyers to buy a property with only a 5% deposit, the government guarantees the remaining 15% which gives the lenders security to approve first home buyers without having to charge lenders mortgage Insurance. 

This scheme was previously known as the first home loan Deposit Scheme.

To be eligible for the scheme applicants must be

• 18 years old and Australian Citizens
• all applicants must be first home buyer
• single applicants with an annual taxable income of $125,000.00
• couples with a combined annual income of up to $200,000.00
• owner occupiers only 

The scheme can be used for 

• newly built houses
• established apartments, townhouses or a house
• off the plan homes
• house land packages