First Home Buyers Guide
Thinking of buying your first home in Queensland? Please fill out the form to instantly download your FREE step-by-step First Home Buyers Guide 2021.
A Complete First Home Buyers Guide to Buying a House
Buying your first home is a really exciting goal to have achieved. But it can also seem like a really complicated process – you need to organise paperwork, get finance approval, find the right property, and research government first home buyers grants. Naturally, you’ve probably got a lot of questions. How do you find the right home loan product? Should you go fixed or variable? Should you use the same lender your best mate/sister/colleague used? Do you need a conveyancer? And what does a conveyancer actually do? Our First Home Buyers Guide answers all your questions in detail.
To put your mind at ease and point you in the right direction, our experienced team of first home buyer brokers has put together all the information you’ll need in our ‘First Home Buyer Guide’. This guide is completely free to download and contains everything you need to know when buying a home in Queensland for the very first time. This ‘First Home Buyers Guide’ is packed full of checklists and tools to help you make the right choice for your first home loan.
Planning to Buy Your First Home in Brisbane? Here Are 6 Tips to Get You Started
1. Get your employment situation sorted:
Lenders like to see job stability, particularly in first home buyers who are often younger and may not be as far along in their careers. Before you apply for a mortgage, try to remain at the same job for at least 6 months – this shows the lender that you have completed any initial trial periods (which usually last for 3 months) and that you’re likely to continue in that role for the foreseeable future. If you’re self-employed, then try to wait until you’ve been running your business for 2 years. After 2 years you’ll have plenty of supporting paperwork that will make obtaining a home loan much easier.
2. Check your credit rating:
You’re entitled to a free credit report every 12 months and it’s well worth taking advantage of this arrangement. Checking your credit score can help you to identify in advance any potential red flags or even mistakes on your file (which can occasionally happen). If you want to work on improving your credit rating then there are several simple things you can do, like paying all your bills on time (even the small ones that seem less important). It may also be worth getting a credit card with a low limit. This may seem counterproductive (after all, a maxed-out credit card is more debt), but lenders like to see that you can manage debt. A small credit card that is paid in full every month will show lenders that you can sensibly manage your financial obligations.
3. Establish a first home buyer budget:
Your budget will be impacted by a range of things, including the size of your deposit, your current income and usual expenses. To help you get an estimate of your potential borrowing power, try using our free calculator. When preparing your budget, make sure you include an allowance for common home-buying costs like pre-purchase inspections, conveyancer fees and transfer duty. If you’d like personalised assistance in determining your budget, then make an appointment to speak with one of our friendly brokers.
4. Talk to a broker about obtaining mortgage pre-approval:
This isn’t a requirement when buying your first home, but it definitely makes the process easier. Pre-approval is when a lender has theoretically approved your application, but the process isn’t yet final. This will give you confidence in how much you can afford to spend and will help to narrow the buying market for you.
5. Base your decisions on research, not just emotion:
We all want to fall in love with our first house, but it’s a good idea to keep emotions reined in during the house-hunting phase. Do some research before you start seriously looking at properties so you’ll have a good idea of what is currently available in your preferred areas. Look at how many properties are being listed for and how much they are selling for. When choosing a location, think about what selling points are relevant to you – after all, great schools or public transport nearby doesn’t mean much if you don’t have kids or you work from home. And if you find a house that you love and that is within your budget, still take the time to do the necessary pre-purchase inspections.
6. Talk to a mortgage broker with plenty of experience in first home buyer loans:
Don’t feel like you have to wait until you’ve found the house you want to buy before you start thinking about finance. Talking to a mortgage broker can help you get started on the right track, providing expert advice that is tailored to your specific circumstances. To find out more about how a broker can help you achieve your first home buyer goals, contact the team at Coronis Finance today.
Why Should I Use A Mortgage Broker When Buying My First Home?
A lot of first home buyers in Queensland try to get finance by approaching their bank. While many are successful in obtaining loan approval, the process can be time-consuming and stressful and there’s no real guarantee that they’re getting a good deal. But when you deal with a mortgage broker you get to:
Save money and time:
A mortgage broker will help you get your paperwork sorted, do all the necessary research on the various loan products available and then give you tailored advice. A mortgage broker will also be able to answer your questions, chase up applications and talk through any issues directly with the lender. Additionally, brokers often have access to discounted loan products, allowing you to get a better deal than you would if you went straight to the lender.
Have real confidence that you’re making the right decision:
A recent report by consultancy firm Core Data found that many first home buyers are missing out on reduced interest rates and government grants because they weren’t sure how to access them. Of the first home buyers surveyed, 43% had “minimal” or “no confidence” in their ability to get the best home loan to suit their circumstances. This is where a mortgage broker becomes invaluable. They have the experience, industry knowledge and technology needed to analyse and identify which mortgage product is right for you.
Access a wide range of lenders and mortgage products:
When you go directly to your bank for a mortgage you are limiting yourself to just one lender and only a handful of available mortgage products. In contrast, mortgage brokers have access to a wide panel of lenders and literally hundreds of different loan products. They can sort through the many deals available and then make recommendations that are customised to suit your needs.
Avoid potential speed bumps in the application process:
A mortgage broker will be able to identify and avoid any potential speed bumps in your home loan application. If you’re self-employed, they’ll direct you to lenders that are most favourable towards your circumstances. If you’re applying with a guarantor then they’ll take that into consideration. If you have a mistake on your credit report, they can help you get the issue resolved before submitting your application. This all helps to create a smooth application process with minimal stress.
Have someone work for your best interests:
Banks are fully within their rights to sell you a mortgage product that will deliver the greatest possible result…for them. But with mortgage brokers, it’s different. Brokers adhere to ‘Best Interests Duty’, legislation that is designed to protect the borrower. Basically, it means that a broker is legally obligated to act in your best interests. So, no matter what they recommend, it must be based on thorough research and a clear understanding of your unique financial situation. This means you can trust a finance broker to give you the best advice.
First Home Buyer FAQ
How do I find out which lenders will offer me the best rates?
When trying to find the right home loan it’s important to look beyond who is just offering the lowest interest rates. You also need to consider things like ongoing fees, charges and what features the loan incorporates (things like the ability to make additional repayments or access redraw). The right home loan for you isn’t necessarily going to be the right home loan for your friend or neighbour. To find out which lenders will offer the best home loan product to suit your needs, talk to a broker since they can sift through hundreds of different products to find the right one for you.
Am I eligible for any first home buyer Government Grants?
The Queensland and Federal Governments are currently offering a range of programs that are designed to support first home buyers. These include the HomeBuilder Grant, the First Home Concession, a cash grant for first home buyers and the First Home Loan Deposit Scheme (which can help eligible applicants avoid paying Lender’s Mortgage Insurance). To find out more about which Government Grants you may be eligible for, talk to a broker or visit the relevant Government websites.
Should I buy an older house or build a new one?
The reality is, there are pros and cons to both options. If you’re planning to build a new house then you may be eligible for the First Home Owner’s Grant and you’ll have the benefit of a warranty on your home. But unless you’re planning a knock-down/re-build, most housing estates are being developed on the outskirts of the city, putting you further from the CBD. In contrast, if you’re buying an older house you have the potential to renovate it to suit your needs and style, but you’ll also need to be careful about pre-existing issues that could end up costing you a lot of money.
Do I have to get a pre-purchase inspection?
You don’t have to, but it is strongly recommended. Many first home buyers choose to make pre-purchase inspections a condition of their contract of sale. Why? Because it offers you protection should major issues be discovered during the inspection. For example, you may make an offer on a house, subject to pre-purchase inspection. But during the inspection, an extensive termite infestation is discovered which has caused considerable damage to the property sub-floor. It will cost tens of thousands of dollars to fix. Thanks to the clause in your contract, you now have the ability to withdraw from or renegotiate the property sale.
Can I get a home loan with a 5% deposit?
If you’ve only saved a 5% deposit then it may still be possible for you to gain home loan approval. With a 5% deposit, you have a few different options available. First of all, you can apply with a guarantor. Alternatively, eligible borrowers can apply for the First Home Loan Deposit Scheme, which allows approved applicants to borrow up to 95% of the purchase price without paying LMI. If neither of these options is available to you then you can still apply with a 5% deposit, but you’ll likely have to pay LMI (which acts as an insurance policy to protect the lender in case you default on your repayments).
What should I know about using a guarantor?
A lot of first home buyers will apply for home loans with the assistance of a guarantor, as it can help you own your own home sooner. A guarantor (usually a close relative) is someone who offers the equity in their own home as security against your home loan. A guarantor allows first home buyers to gain finance approval with a deposit as low as 5% because the guarantor is taking on the added risk, not the lender.
Will I need a conveyancer?
Technically, under Queensland law, you don’t have to use a conveyancer. But most first home buyers will choose to use them and their use is highly recommended. Why? Because a conveyancer handles the legal transfer of sale. They file all the necessary paperwork and carry out all the required checks to ensure that the property you have purchased can transfer legally from the seller to the buyer. If you try to manage this yourself, it means you a legally held accountable if there is a delay in the sale (opening you up to potential litigation).