Are you tired of renting looking to buy your first home?
Do you want a loan cheaper than you can get at the big banks?
Are you worried that you don’t have sufficient deposit?
Do you need help obtaining the First Home Owner’s Grant?
Do you need to use a guarantee from your family?
Do you want a 24-hour pre-approval?
If the answer to any of the above questions is “Yes”, then we can help you. We also have hundreds of apartments available at the right price and great home loan products to suit your needs.
Buying your first home doesn’t have to be a stressful affair. In fact it is one of the most exciting things you will do in your life – if you do it the right way.
We have a range of the best home loan products in the market and a fantastic team of people who will help you talk that “special” step. No obligations at all. Plus all our services come with a Cash-Back Guarantee for your peace of mind.
Go through this website which has comprehensive information about property market and mortgages. You could download our report Unlock Your Dreams or contact us.
Read here about the planning you need to do to get the right result. You can download the information given below by clicking here.
Introduction
Do not wander into weekend home opens and make an offer on the first place you fall in love with. You will find plenty of information available on-line, in local newspapers and in the sales magazines available at all real estate offices. Remember these are properties listed for sale and have not yet sold so they are asking prices. You would expect to pay less than the asking price but not in all cases.
There are two ways to purchase a property listed for sale – by Private Treaty or by Auction. With Private Treaty sales, in some states the owner will provide a contract for the sale of the property and the purchaser will then “exchange contracts” ie offer to buy the home at an agreed price. In other states, an Offer and Acceptance will be completed by the agent and then signed by seller and purchaser. If the property is to be put to auction you will possibly pay more than the figure the agent indicates. Agents often give a ballpark figure lower than the likely reserve price, to attract more bidders and interest in the property. If you intend to bid at an auction I recommend that you attend a number of prior auctions so that you can get the feel for the procedure and so that you don’t feel too intimidated when your turn to bid comes. You gain a good understanding of buying by auction and get some good tips on inspecting properties by watching a television program “Homes Under the Hammer” on the Fox How To channel. You can obtain a good understanding of the value of properties in your area by subscribing to some on-line sources such as RP Data or Residex. There is a fair amount of free information on their websites and via their newsletters and you will be able to buy reports by postcode, showing anticipated future property prices and rental returns for your suburbs.
Start your research in the knowledge that it could take a while and that you are prepared to pass over properties until you thoroughly understand the market. Not only should you research prices but you should make a comprehensive checklist of every property that you inspect that may fit the bill. You should record what the house/unit comprises of, its condition, anything that may need repair or replacement and the location. Check to see if any additions or renovations that have been done comply with council requirements and that approval was obtained. Is it a good street to live in? How far to shops and schools etc? Is there a bus or a train service? You should also check for building or usage restrictions such as easements and encumbrances over the property, put there by the council, water board or other government bodies. There are many good books available to guide you on all these things at your bookstore. Of course you should obtain a Building Report from a qualified building inspection company. This will answer most of your concerns about the building and the report will be required by your lender.
If after commencing your search you don’t feel qualified to make an informed decision or you cannot locate exactly what you want you could ask a trusted friend to help.
Handy Hint: Don’t get too emotionally attached to a property as you don’t want to be let down if you are not successful in purchasing it.
There are many types of property. Here are a few of the common types of residential properties: House, Dual Occupancy, Duplex, Triplex, Unit (apartment), Townhouse, Villa, Terrace and a few more. Houses generally have a land title which entitles the owners to sole use of the land and the improvements within the boundaries. This is usually a Torrens title or an Old System title. Where parts of a property have common areas to be shared by all tenants most other titles usually designate and describe, for example, a unit number and garage, carport etc as being for the sole use of the person named on the title however all common areas are to be “shared.” No common area is individually assigned to any unit. These properties will usually have a “strata title.” Other types of titles are Company Title and Community Title. It is important to understand what you are buying as some types
of title might impose restrictions and some titles, particularly strata titles, may incur expensive monthly or annual levies, payable to the body corporate.
Properties can be bought in a number of ways depending on how many purchasers there are and whether or not the purchasers are to be individuals solely, together or separately, or through a company or trust. Most properties are bought in the names of individuals and these names are entered on the land title as the owners of the land and the improvements thereon. It is important that careful consideration is given to how the property is purchased if there are two or more purchasers. Properties may be purchased in different ways. Husbands and wives usually purchase as joint tenants, which means that upon the death of one of them the property automatically passes to the surviving party. It cannot be willed. If there are three or more parties the purchase will be made as Tenants in Common. This means that each party owns a certain share of the whole property, say 50% or 20%, and his/her share can be separately sold off or willed to someone. This option is available to two people as well.
Buying or building your first home is an exciting experience and very satisfying when you get it right. To help with this big task we have set out below some important points to consider to successfully own your own home.
How Much Do I Need?
Well it depends on where you want to live and the type of accommodation you are looking for. Most people prefer to save a deposit, which is used as their contribution towards the purchase, and to cover the associated transaction costs. They may then borrow up to as high as 97% of the purchase price, but borrowing above 80% of the purchase price will cause quite a bit of additional set up cost. The more money you can save for the deposit, the better.
How Much Can I Borrow?
The amount that you can borrow is determined by the lender by testing your repayment ability based on your income, some other personal information, such as credit card limits, and assumed details, such as living expenses. Usually, loan terms are for 25 or 30 years, the longer the loan term the smaller the monthly repayment. Click here to work out how much you can borrow.
Where Will I Live?
Where would you like to live? Are you looking for a house or a unit? Are the available homes in your preferred area within your price range? Are you looking for a home for the next few years, or to live in for an extended period? If you have a young family, does the area you have chosen suit the needs of children? Does the area have good access to amenities and to major centres? Does the council have plans for any further developments in the area? What is the capital appreciation history of this location?
Selecting Your Home
Be absolutely sure that the home you have selected has no hidden surprises. Obtain a building report to ensure you are not buying someone else’s problems. Check that the local council has approved all alterations and renovations to the house. Check the area at different times such as weekends and weekdays to confirm it is as you think it is and that there aren’t any noise, traffic and parking issues that would be a nuisance to you. Obtain other opinions as to the value of the house. Ensure that the council rates (if a house) or the Body Corporate levies (if a unit) are within your budget. Your solicitor will help with some of these things.
Obtaining a Home Loan
Calculate the cost of purchase and all of the additional costs that will be incurred such as:
• Stamp Duty on the purchase contract
• Loan set up costs
• Lender’s Mortgage Insurance (Usually applicable if you have less than a 20% deposit)
• Legal Fees
• Other moving and relocation costs
Ensure that you obtain a conditional loan approval before you commit to purchasing a property and ensure that you understand the conditions that must be met before an unconditional approval will be given. Iden Money and Property provides these.
Exchanging Contracts
If you buy in a state where contracts are exchanged, once you have located the home you wish to buy and made an offer that has been accepted by the vendor, the next step is to exchange. Employ a solicitor to review the contract of sale on your behalf – they will be able to advise if there are any non-standard conditions. Fully understand the “cooling off period” terms and conditions. Be certain that your finance is approved and will cover the amount required to settle, before you execute the contract. When you sign you will be required to hand over a small deposit, usually 0.25% of the purchase price, so on a $400,000 purchase approximately $1,000. A 5 day business day ‘cooling off period’ usually follows, which allows you to withdraw from the contract should you discover something unsatisfactory (This benefit is not available at auction). It is during this period that the lender will value the property, pest and building inspections would be
completed and you would satisfy any outstanding conditions on the conditional loan approval. The deposit (usually 10% of the purchase price) is paid on expiry of the cooling off period; however it is common for a lesser amount than 10% to be negotiated.
Arranging Settlement
Once the approval is finalised and the deposit has been paid loan documents will be prepared and forwarded to you for execution. Your solicitor should check these documents and assist you to sign them. You will need to arrange insurance over the new home and provide a copy of the certificate of currency to your solicitor. The lender’s name must be noted on the policy as an interested party. Your solicitor will now make further enquiries into the status of the property to ensure that you receive a full and clean title and that no existing monies owing or charges against the property will remain after settlement. The solicitor will calculate the exact amount of monies to be paid out at settlement, with any additional contributions from you to be given to your solicitor for use at settlement. Settlement will occur on a date to be agreed between the purchaser and vendor, often 6 weeks from exchange of contracts. In exchange for full payment to the vendor the property title deed will be handed to your lender. A mortgage will then be registered and the lender will keep the title in safe custody.
Remaining Informed is Vital
Your home loan application process right through to settlement will be consistent across all lenders. The important steps are shown below and your Loan Writer should keep you well informed of the progress, right through to settlement:
1. Loan application is submitted by Loan Writer to the lender.
2. Lender requests a credit report from a Credit Reporting Agency.
3. Lender makes full assessment and conditionally approves or declines your loan.
4. If Lender’s Mortgage Insurance is required the lender will arrange this.
5. Lender arranges for a valuation to be completed and you may be contacted by the valuer to arrange for inspection.
6. Lender receives the valuation and if it is in order and there are no other outstanding conditions the loan becomes unconditional.
7. Loan documents are prepared and forwarded to you or your solicitor for execution.
8. You are required to arrange comprehensive replacement value insurance over the property.
9. Documents are returned to the lender who will arrange a date for settlement with your solicitor/conveyancer.
10. Carry out a pre settlement inspection with the agent.
11. Settlement occurs.
12. You can pick up the keys. Congratulations.
You should have been informed of the milestones every step of the way.
Within a few days you will receive a letter from your lender confirming settlement, your loan details and quite a few other things including cross marketing material. Give us a break! The big banks are chronic at this. Find a lender who respects your privacy.
You should be visited by your Broker or Loan Writer – with a house warming gift if you are lucky.
Post Settlement
The property is yours. The agent will provide you with the keys to the property and you may move in. The lender and your solicitor will provide you with a summary of the entire transaction detailing how the funds were disbursed. Good lenders provide details of your loan, dates that payments will be deducted and lots of product and Internet/Telephone Banking details.
First Home Owners Grant
The Australian Government, under certain terms and conditions, may provide a grant to help you with the purchase of your first home. You can find details about this and other assistance provided by state governments by going to one of these websites:
NSW www.osr.nsw.gov.au
VIC www.sro.vic.gov.au
QLD www.osr.qld.gov.au
TAS www.treasury.tas.gov.au
SA www.revenuesa.sa.gov.au
WA www.osr.wa.gov.au
ACT www.revenue.act.gov.au
NT www.nt.gov.au
There was an extra boost for First Home Buyers until 31 December 2009. Since January 1, 2010, the First Home Owners Grant is now $7,000. In order to qualify for the First Home Owners Grant, you must meet the following eligibility criteria:
1. Each applicant is a natural person and not a company or trust.
2. At least one applicant is a permanent resident of Australia
3. Each applicant must be at least 18 years of age.
4. All applicants and/or their spouse/de facto have not owned a residential property, jointly, separately or with some other person, in any State or Territory of Australia before July 2000.
5. All applicants/and/or their spouse/de facto have not previously owned a residential property jointly, separately or with some other person in any State or Territory of Australia, and occupied that property for a continuous period of at least six months.
6. Each applicant has entered into a contract for the purchase of a home or signed a contract to build a home on or after 1 July 2000. In the case of an owner-builder, laying of the foundations commenced on of after 1 July 2000.
7. This is the first time an applicant and/or their spouse/de facto will receive a grant under the First Home Owner Grant Act 2000 in any State or Territory (unless subsequently repaid.)
8. At least one applicant will occupy the home as their principal place of residence for a continuous period of six months, commencing within 12 months of settlement or construction of the home.
Also, each state provides other benefits, ranging from stamp duty concessions to additional cash payments. You should check the above website for the available benefit in your state.
Handy Hint:
Supporting documents for the First Home Owners Grant must be “certified” copies. Read this condition carefully.
Interest Rates - Fixed or Floating
In July 2009 the Prime Minister said that variable interest rates would probably be 1% higher by July 2010. The average standard variable home loan rate of the major banks in July 09 was 5.77%. The government thinks that within 12 months this could be 6.77%. So, is it not sensible to consider a fixed rate at this time? Fixed rates give certainty for a period.
