Purchasing your first home is exciting and, can be a daunting experience. It will probably be one of the largest financial commitments you will make in your life, so it pays to be well prepared. Our first home buyers guide below will help you prepare and make the right choices.
How much can I borrow?
It’s important to ask yourself how much you can afford as your expenses may be higher than what you’re loan repayments could be. Your Bernie Lewis mortgage adviser can advise you of your borrowing capacity.
How much deposit do I need?
There is no definitive answer because there are many variables when purchasing a home. The minimum deposit required can range from three to ten percent, depending on the lender and the type of loan product.
Some lenders require you to provide proof of your genuine savings via bank statements. These statements will need to demonstrate that you have saved your deposit over a minimum period of at least 3 months, and in some cases 6 months. Money saved ‘under the mattress’, gifted from another person, or from the sale of a car or other lifestyle assets does not count as genuine savings.
When calculating what it will cost you to buy your first home make sure you include government duties and fees associated with the purchase. This can add another four to six percent of the purchase price to the cost of the home but need not come from genuine savings. If eligible, First Home Owner Grants can assist towards these costs. If you are unsure about these additional costs speak to your Bernie Lewis mortgage adviser.
Low/no deposit options
If you don’t think you have enough of a deposit to buy your first home, don’t stop and walk away. You still have home loan options. Bernie Lewis is a HomeStart Loan Manager. HomeStart Finance was created by the South Australian Government to provide affordable housing finance solutions. Provided you are a South Australian resident and can save a minimum of $1,000 over a minimum 3 month period or provide 12 months satisfactory rental payment history, you may qualify for a HomeStart loan.
Family Guarantee loans are another alternative loan option for first home buyers with little or no deposit. Borrowers are able to purchase or refinance the property by relying on guarantors for security and/or servicing support. The guarantor should usually be a parent, parent-in-law or step parent; however lenders will look at each case individually.
Making the right offer on a property
You should already have pre-approval for your home loan and know how much you can afford. You’ve found the house and are now wondering what you should offer.
Bernie Lewis can assist you with your property research and provide you with information about a particular property to help you decide what it’s worth.
As part of the service your Bernie Lewis mortgage adviser can provide you with an RP Data report, which has the most current and relevant information about a property. Included in the report is comparable recent sales in the area, suburb profile, median house price history for the suburb and the number and types of properties recently sold in the area.
With this valuable information you’ll have a greater understanding for the suburb you’re looking to buy in and a guide to house prices.