Is this you?
“I don’t know what I can afford to buy. I don’t know what deposit I need. I don’t know if I’ve got enough money saved yet. Actually, I’m a first home buyer! I don’t know anything!”
That might seem funny, but it’s actually the best way to embark on the first home buying trail. And here’s the real FinancialPlus. You won’t waste any time getting intimidated, bamboozled and deflated by banks if you go straight to a broker. Whether you’re a fountain of first home buyer knowledge or a self-confessed newbie, the banks will treat you the same. You either qualify or you don’t.
Is it better to get a loan through a broker?
It certainly is! You’ll save an awful lot of time and probably a lot of money. See, what happens when most people go it alone is they go on endless wild goose chases. They’re talking to banks that have no interest in them. The bank doesn’t know that yet, but they’ll be happy to waste three days of your precious time before they find out and tell you. That’s the first big advantage of a broker. We go through all the available banks and lenders based on your situation and weed out everything that’s a waste of time. It might only be one small thing that’s a deal breaker, but we’ll save you the heartache of finding out the hard way.
So what does a broker do?
Everything! Well, almost everything. First we work out how much you can borrow and identity lenders and loans that suit you. We assemble all the requirements (a big, complicated job in itself!) and liaise with the chosen lender.We work with you to make sure that you get all available concessions and work with your solicitor to ensure settlement goes smoothly. Just as importantly, we work with you to make sure everything is great once you move in.
So, how much deposit do we need?
We can answer that with another question: how much do you want to borrow and how much income do you have to service the loan? Let’s say you’ve got the deposit for a $500,000 home. Nice! But, whoops, your income is only enough to repay a $400,000 home. Confused? Frustrated? Probably, but that’s where a good broker can take all your financial facts, good or bad, and get you into a home you can actually afford. Don’t forget, it’s not just about buying that first momentous home, you’ve got to be able to sleep peacefully in it at night knowing it’s still going to be yours tomorrow.
What’s the minimum deposit?
The absolute minimum these days is 5% of the purchase price, but you’ve got to add costs of buying the home to that – your legal fees, pest and building inspection, lender fees and government fees and charges. In Queensland round figures, you’re talking about $2,500 in costs for a $300,000 first home.And then there is mortgage insurance if that applies, an unavoidable annoyance that protects the lender if things go pear shaped. Mortgage insurance can add a few thousand to overall costs.
What will my repayments be?
This depends on the current interest rates but may be a pleasant surprise. Assuming you’re renting, have a look at the place you’re in right now. If you were to buy that place, you might pay another fifty dollars a week and it would be yours. That’s all! Does it start to make all that dead money you’re paying to a landlord seem a bit ridiculous? That’s a real FinancialPlus if we can match your situation to the right bank. Your own home for not much more than rent.
How high should we set our sights?
There are two things to think of here. How important is it to get started in the property market? And, how important is your current lifestyle? Ultimately one will either enhance the other or get in its way. Your first home has to be an affordable home well within your means. It gets you in the market. You can always turn it into an investment property and rent it out as your confidence and equity grows.
What happens if I change jobs?
Unfortunately, banks don’t like change. If you’re seriously thinking of buying a home, don’t change your job before you get the loan! If you do, you’ll probably have to sit out another six months while the bank waits to see some stability in your new role.
Can my rental record help to get a loan?
We can make that work for you. If you don’t have genuine savings, sometimes we can present a good rent ledger as proof of your ability to repay a loan.
If you’d like to chat about your first home options, call us on 07 5564 5903 or make an enquiry.