Property experts are calling 2019 the year of the first home buyer.

We sat down with Nerida Consibee, Chief Economist at realestate.com.au, to find out why first home buyers (FHBs) are in with a chance, and the borrowing tips you need to make sure you’re financially fit and prepared for the opportunities ahead.

Why is 2019 the year of the FHB?

For the first time since peaking in 2009, home loans for first-time buyers have been consistently trending upwards. According to Conisbee, this is due to the culmination of a number of factors.

“One of the biggest challenges for first home buyers is getting a deposit together, and if they do, they often find themselves competing with investors for the same types of properties at similar price points,” says Conisbee.

“First home buyer grants in many states have become more generous,” she says. And since the Royal Commission, “there has been a big drop in investor lending.”

Recent research commissioned by Suncorp found that confusion and a lack of knowledge may be the barrier holding this group back from home ownership.

The study found that despite two thirds of first home buyers having saved or actively saving a deposit, more than half (60%) don’t know if they can afford the home they want, 50% don’t believe they can afford their preferred area and a third believe there is limited availability in the market.

Suncorp Executive General Manager Lending, Glenn Haslam, says buying a home can feel overwhelming, however, if people have the right information and support, it can be a straightforward process.

“While first home buyers are showing a willingness to get into the market, the unknowns of the process can sometimes make it daunting,” says Haslam.

“This is concerning because now is actually a really encouraging time for new buyers, particularly those in Queensland where property prices remain more affordable. The local economy is improving and population growth is supporting demand.”

How to get started with a home loan

“It’s a good idea to get a pre-approval before you start looking for a home. That way you have a clear idea of your budget,” says Conisbee.

“Your current financial institution that you do your main banking is a good start, or contact someone you know that has a home loan as they can recommend you to a lender that they have used,” adds Adam Kambouris, Suncorp’s Area Manager for Mobile Lending.

Kambouris says there’s a lot of information out there, so it’s easy to get overwhelmed in the beginning. “I would say, start by researching your buying costs then understand what’s important to you and have a clear idea of your income and complete outgoings,” he says.

Once you have a picture of your position, you need to do your homework on current mortgage rates.

Next up, Conisbee suggests getting in control of your finances by saving hard, reducing your spending and being aware of your income and expenses. Ensure this is done before you see a lender as banks have tightened their responsible lending practices, and when it’s time to take the plunge, go armed with proof.

“Make sure you have all the information required when completing the home loan documentation. This includes information on your earnings and expenses, as well as any debt or savings you have. Lenders require proof, so don’t go in empty-handed,” says Conisbee.

Still feeling overwhelmed? This handy home buying guide goes back to basics.

According to Kambouris, you should then sit down with one or multiple lenders to discuss the different options available to you. Or contact a Coronis Mortgage Broker who can compare over 50 lenders for you. Including comparing variable or fixed loans, basic or bundled loans, and other products like offset accounts, based on your individual circumstances.“First home buyers are often seen as a relatively safe option for banks. They generally don’t borrow a lot and are also at the beginning of their home owning journey so for a bank, it can be the start of a lifelong relationship,” says Conisbee.Learn more about buying a home before you take the plunge.

Original article

First Home Buyer Guide

Everything you need to know to buy a property in one easy guide. This guide is packed full of checklists and tools to help you make the right choice.

But the truth is, every additional percentage point in your home loan interest rate could cost you thousands of dollars every year… and as your home loan is most likely the longest loan you will ever have. If it was a short-term loan, it wouldn’t matter as much… but 30 years is a long time to be paying extra money if you don’t need to.

Real estate is expensive so why would you want to pay more than you have to?

Look at the two below examples:

Loan $500,000 $500,000
Interest Rate 3.8% 4.3%
Term 30 Years 30 Years
Total Principal + Interest $838,800 $890,640

Total savings: $51,840

A difference of 0.5% in your home loan could end up saving you more than $50,000… which means you could pay it off faster!  Like we said, it really adds up over 30 years.

What we’re trying to say is your interest rate matters. You don’t want to pay more than you have to… which is what we’re here to help with.

Our team of mortgage brokers have access to more than 40 lenders and are experts are finding the right lending solution for your needs.

If you would like to book an appointment, contact us today.

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