The First Home Buyer and Getting That Loan
Life is Full of Firsts – the first pet 🐶, the first car 🚙, the first kiss 💋, the first job 🖥️, the first mortgage 💸. Some of these things are easier than others, right?
Here we outline the first home loan process with the five steps to getting your very first home loan.
Everything you Need to Know as a First Home Buyer
1. Nail your deposit and budget 💰
Navigating the process can be quite daunting, especially when it is your first time. It often means that you need to budget and compromise to get that all-important deposit together! For first home buyers, most lenders prefer to see that you have saved a deposit of 20% of the total house price to give you a loan. So, if you are buying a house for $500,000 you will need to have saved a deposit of $100,000. However, if you don’t have this much deposit, there are strategies that we can help you with for you to save or get a loan using LMI. Our recent blog article on the QLD Home Owners Grant is worth taking the time to read.
How do I get the deposit together?
It can be daunting! This is very normal and many FHB go through this. However, there are ways to help get your deposit together.
Saving and budgeting is part of buying a home, but there’s ‘old-fashioned saving’ and ‘non-genuine saving’. Here are two ways to help get a deposit together that you might not have thought about:
Grants, Exemptions, and Deductions: As a first home buyer, there are a bunch of grants, exemptions, and deductions offered by the Australian Government. Your broker can help you find out what you are eligible for.
Guarantors: A guarantor can be your parents, parents-in-law, step-parents, grandparents, or siblings. They must own a certain amount of their property (their equity), which effectively becomes your deposit.
Lenders love this stuff! If regular savings have been in your account for at least three months, it shows them you have a pattern of managing your money responsibly. People have been doing it forever, but you need to make a game plan.
Firstly, set a budget and stick to it. Work out how much money you earn and then, for a month, record your living expenses so you know your spending habits. Factor in presents, bills, general living, and treats. Set up a savings account and make sure you commit to putting a certain amount in it each week and do not touch it. Spend only what is left. It will get easier as you adjust to spending less.
2. Navigate the Loan Process
Chat with us: Here, we will work out your financial and lifestyle goals and what you can reasonably borrow. We will then hunt through our panel of lenders to find the loan best suited to your needs. You can get on with life while we do the work!
Create a game plan: Your broker will get back to you in a few days with loan options to consider. Once chosen, your broker will get your application ready for submitting for pre-approval.
The next step will be getting the green light 🟢, ‘you are pre-approved’.
Once this happens you should organise a conveyancer or solicitor so they can take care of the property purchase when you are ready.
Then the exciting part really begins 😀! Go House Hunting 🏡
Visit open homes 🏘️ Search online 🖥️ Drive the streets 🚘
Whatever you need to do to find that first home ✅
Then when you find the house, you know you have pre-approval, make an offer 💥. As long as you stick to the amount of your pre-approval, your dream could soon become a reality.
After that all that is left is the paperwork – and we can help sort that. During this part of the process, your property will be accepted by the lender. The details of your valuation and insurance will be provided if needed, and a settlement day will be put on the calendar.
3. Getting the right loan
You’re going to want a broker on your side when it comes to getting a loan. We have access to a panel of over 60 lenders, from the biggest Australian banks right through to specialist lenders.
We will find the one that has policies that match your circumstances and will say ‘YES’ to your application.
We will negotiate with them on your behalf to find the most competitive loan for your situation.
We will negotiate and save for you! That is our job! And we are great at it 😉.
There’s plenty of options and product features that come with different loans; offset accounts, redraw facilities, fixed and variable rates. We look to save you money in interest payments and fees by finding the right loan and repayment structure for you.
4. Know the industry jargon – Scheesch that is a mission in itself.
It is hard navigating the industry terms. To help you understand these take a look at this helpful article or ask us! We know ALL the lingo 🤑!
5. Find Your Dream Home 💭🏡
Whether it is your dream home or the dream you can afford right now, owning a home is a big, but exciting, commitment. You know your budget, you may know the location where you want to live, but you will still need to decide on the other all-important thing – what are you going to live in? What will suit your lifestyle – new versus established, house versus unit? There are many pros and cons to consider. If you need some tips on the Pros & Cons of buying your dream home, send us an email, firstname.lastname@example.org, and we will deliver this article right to your inbox!
You can also download the First Home Buyers Guide from our website. Simply click here!