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So, you’re ready to buy your first home? Congratulations, this is an exciting time. But it can also be a daunting time as you navigate through a new phase of your life. Which leads to many questions. Questions we’re here to help answer.

How much can I afford to pay?

This is the question on every first home buyers’ lips. Can I afford that amazing four-bedroom home in that elite suburb or do I have to look at the three-bedroom renovator in the suburb over?

How much you can afford to pay will depend on both how much you earn and how much of a deposit you have access to. Both will need to be individually assessed, but it’s easy to do. You’re first step should be to talk to your mortgage broker and figure out your ballpark shopping range so you can start house hunting within your budget. 

How much deposit do I need?

Generally, lenders will like to see 10 per cent of the purchase price. However, by having 20 per cent you’ll be able to avoid paying Lenders Mortgage Insurance

Although first home buyers can also pay as little as five per cent deposit and avoid Lenders Mortgage Insurance by accessing the government’s First Home Loan Deposit Scheme

What hidden costs should I expect?

Stamp duty is the biggest one people seem to miss. Stamp duty is the tax you pay on a property purchase and is usually five per cent of your purchase price. Some other costs you’ll come across is conveyancing fees, building and pest inspections and repairing defects that might arise after you’ve moved into your new home. 

Am I eligible for any grants?

There are a number of grants available at the moment. These include the First Home Loan Deposit Scheme, HomeBuilder Grant, First Home concession and Queensland First Home Owners’ Grant. 

A breakdown of each grant can be viewed here

Where should I buy?

Location is a big consideration. Not only do you want to enjoy the area you’re living in but you might also need to look at local schools in the future and research property trends in the area. 

A good place to start is by asking yourself if you can see yourself still living in the area in five years’ time. What will your life look like then and does the location you’ve chosen tick all future boxes as well? 

Why is the vendor selling? 

Knowledge is power when it comes to the property market. Seeking insight into why a vendor is selling may help you decide on whether you’re purchasing the right home for you. Perhaps the vendor needs a quick sale. This may offer your more bargaining leverage. Or maybe the house has termite damage and the owners can’t afford to fix it. Either way you’ll want to know what you’re getting yourself into. So, make sure you ask plenty of questions. 

Do I need to organise a building inspection?  

This is a big yes. The money you’ll pay for peace of mind will be well worth it. Building and pest inspections will give you insight into current and future maintenance that might be required to your property. This will allow you to factor this into your budget, and it may also give you more bargaining power, depending on the request. 

Do I need a lawyer or a conveyancer?  

You could hire either, but it depends on how complex your property settlement is. 

Conveyancers are licensed professionals who specialise in providing advice and information about the sale of a property. They’ll be able to review your contract, identify red flags and settle the property transfer for you. 

Property lawyers can not only take care of your conveyancing as above, but they can also advise on other areas of law that may relate to your sale, for example any tax implications or how a sale might impact divorce proceedings. 

First Home Loan Deposit Scheme Extension – What You Need To Know?

The popular First Home Loan Deposit Scheme has been extended for eligible first time home buyers in Queensland, Australia.  This means there another 10,000 places up for grabs.   These places have been reserved exclusively for people wanting to build a home or buy a newly constructed home.  Here is everything you need to know about the FHLDS Scheme.

What Is The First Home Loan Deposit Scheme?

The First Home Buyers Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers to build or purchase a new home sooner.  The FHLDS Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC). In the 2020-21 Federal Budget, the Australian Government announced an additional 10,000 Scheme places for the 2020-21 financial year, specifically for eligible first home buyers building or purchasing new homes.  These additional places are known as the Deposit Scheme For First Home Loan Buyer (New Homes).  There are currently 27 participating lenders across Australia offering places under the FHLDS Scheme. Currently, the Scheme has already delivered 20,000 places to date. 

What Does This Mean For Me?

Usually, first home buyers with less than a 20 percent deposit need to pay lenders mortgage insurance. Lenders mortgage insurance often adds thousands of dollars to the cost of your home loan.  Under the Scheme, eligible first time home buyers can purchase or build a new home with a deposit of as little as 5 percent.  This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer home loan.

The Finer Details

The Scheme extensions cover buyers who want to buy:

  • A new house that has never been lived in
  • A house and land package that’s yet to be built (or is in the process of being built)
  • An “off the plan” property 
  • A block of land and then build a house on it

Like the original FHLDS, the Scheme is means tested. It is only available to first time home buyers who have a taxable income of up to $125,000 per annum for the previous financial year (if applying as a single applicant) or a combined taxable income of up to $200,000 per annum (if applying as a couple). Investment properties are not eligible.  A revised set of property price caps also apply for eligible properties under the Scheme. For Queensland in Brisbane and regional centres the price cap is $650,000 and for regional Queensland, it is $500,000.  First Home Loan Deposit Scheme Applications opened on 3 November and history shows that these places often run out quickly. It’s best to speak directly to your mortgage broker in Queensland to see if you’re eligible to apply for the Scheme’s extension.  The cut-off date for applications is 30 June 2021, or if they run out before.