Home Loan Tips

Home Buyer Home Loan Tips

Buying a home can be one of the most exciting times of your life. The secret to ensuring that you enjoy this time is to be prepared!

First Home-Buyers Grant

If you are a first home buyer, a $7000 grant is available to go towards the purchase of your property. The First Home Owners Grant comes from the Commonwealth government GST but the grant scheme is administered by the state and territory governments. In summary, to qualify for the First Home Owner Grant:

• You, or a joint applicant must be an Australian Citizen or permanent resident;
• You must be buying/building your first property as a person, not as a company or trust;
• You, or your spouse must not have previously owned an interest in land in Australia that had a residence on it prior to July 1, 2000 .

Each state is different, but first home buyers in New South Wales and Victoria get a further bonus from their state governments. Other states offer various benefits such as stamp duty concessions to first home buyers. Any of the following websites will give you information on the First Home Owner schemes in your state, including detail on common questions about:

You can click on a link below or call a number listed to receive information relevant to your state.

Research the loans available

Before deciding on one particular loan, research the loans that are available to you. You can research loans on this website yourself or simply call an X Inc Lending Consultant on 13 XINC (13 9462) to give you this information and help you get the loan you want.

Calculate how much you can borrow

Before applying for a loan , it is a good idea to use our Borrowing Power Calculator to estimate the amount that you would be able to borrow.

Loan Pre approval

Whether you're preparing to buy your first home, an investment property, or even refinancing, it pays to get ahead of the game with a pre approved home loan. That way when you find the property you are looking for, whether at auction or through a real-estate agent, you are ready to move quickly. Loan pre-approval usually takes about 24-48 hours and can be obtained well in advance of when you buy. Just ask your X Inc Mortgage Broker. (Contact Us if you would like to talk to a Broker about Pre approval).

Know your loan opportunity

Your Mortgage Broker can help you with this, but prior to getting your pre-approval think about whether or not you will be in a position over the next few years to make significant extra payments into your home loan. If you believe you will make significant extra repayments you might consider the advantages of a variable rate. If you think you will be making consistent minimum repayments consider the benefits of a fixed rate. Be aware that if you take a fixed rate and decide to exit the fixed rate product prior to the expiry of the fixed rate period you may face significant penalties.

Your deposit - save your money in all ways

The deposit you will need will depend upon the value of the property you wish to buy. However you can usually get started on as little as a 5%-10% deposit. The bigger the deposit, the more money you will save, as your chances of having to pay mortgage insurance are reduced, your loan repayments will be lower and you will pay less interest.

If you are planning to buy a property in the next few months, don't lash out on other high-cost items before you do. Large purchases can hurt your credit history, especially if they're made in the few months before you plan to buy your property and you have to take out a loan.

Deposit - Where do you get it from?

You do have options, and some you may not know about:

• Save for it in the traditional way
• Gifted money
• Equity from other property (usually your parents)
• Pledges from relatives
• You may not need one if you have a good income
• Use your First - Home Buyer's Grant if you are eligible

Stamp Duty, Mortgage Registration, Mortgage Stamp Duty & Registration Fee

There are a number of government fees, taxes, legal fees and lender fees incurred when you buy a new home and go for a home loan. Remember that most of these are paid before or around the time your property settles so your savings or loan will need to cover these amounts as well. Each of the taxes / fees above is a state government based fee and it is applied according to the law of the state where the property is in (ie: not the property that you live in, if it is an investment property).

Mortgage Insurance is paid whenever you have less than 20% deposit, you will almost always have to pay mortgage insurance (LMI). This insurance is a one-off payment by the borrower to the lender (or lender's insurer) to 'insure' the loan.

Mortgage Application Fees vary greatly between lenders. Some charge nothing, others $600 or more. As this amount varies so much and for so many different reasons, it is best to discuss it with your broker when deciding on the loan.  

Legal Fees

If you choose, it is possible to do your own legal work and kits are available for this purpose. Unless you're prepared to work through all the steps in detail, however, it's best to retain the services of a conveyancing agent or solicitor who specialises in property purchase. They carry the relevant insurances, which protect you against various expensive penalties and levies if you fail to settle on time or fail to pay stamp duty on time. Dependent upon the value of the property and the state you live in, these legal fees can cost as little as $200 plus disbursements up to over $1,000. Remember to negotiate fees with your solicitor or conveyancer; don't just accept their 'set fee'.

Inspections

When you buy a house, building inspections are highly recommended & are sometimes a condition of the loan / finance approval. However it is always a good idea to have one done irrespective of the lenders loan approval conditions. Expect them to cost somewhere between $250 and $500. And d on't forget to do pest & termite inspection. They typically cost between $200 and $400.