Buying or building your first home can be very exciting but it can also be an overwhelming experience. It will probably be one of the largest financial commitments you will make in your life, so it pays to be well prepared and get the right advice and right solution.
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How much can I borrow?
Usually the first few thing you want to know when buying your first home is how much deposit do I need? How much money can I borrow? Whilst you can find this information by using our online home loan calculators, the more important question is: how and where do I start? Your Bernie Lewis Home Loans Mortgage Broker will look at your goals, assess your income and expenses, and look at how much deposit you will need. They will also discuss all your options and take your through the process step by step.
How much deposit do I need?
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.
When calculating what it will cost you to buy or build 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, the First Home Owner Grant, and the Off-The-Plan Apartment Stamp Duty Concession can assist towards these costs. If you are unsure about these additional costs speak to your Bernie Lewis Home Loans Mortgage Broker.
Low deposit home loans
If you don’t think you have enough deposit to buy or build a home, don’t walk away. You still have home loan options, such as low deposit or no deposit loans and more. Provided you are a South Australian resident and can save a minimum of $3,000 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 their 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 or land and are now wondering what you should offer.
Bernie Lewis Home Loans 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 Home Loans Mortgage Broker 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.
The Federal Government introduced the First Home Owner Grant (FHOG) to help first home buyers offset the increased cost of constructing a home due to the introduction of GST.
State Governments have also introduced initiatives to assist first home buyers enter the housing market. In South Australia, a FHOG of up to $15,000 is available for the purchase or construction of a new home.
The Grant is only available for a new home that is your principle place of residence and has a market value of less than $575,000.
Do my income or assets affect the Grant?
No, the Grant is not means or asset tested.
What can the money be used for?
An applicant can use the money for any legal purpose. There are no regulations on how the money can be used provided you are eligible to receive it.
When will the Grant be paid?
The grant will be available at settlement for the purchase of a new home. If you are building, it will be paid on the first construction progress payment. Owner builders will receive the Grant on production of a Certificate of Occupancy/Completion.
Who is eligible to receive the Grant?
A first home buyer who fulfils the criteria below:
- At least one of the applicants must be an Australian citizen or have permanent residency in Australia. New Zealand citizens permanently residing in Australia who hold Special Category Visas may also apply.
- In general, no applicant or their spouse/domestic partner can have previously owned a residential property anywhere in Australia. However there are some exceptions to this rule. For further details please contact your mortgage adviser or RevenueSA.
- Except in cases of legal disability, applicants must be natural persons; that is, not a company.
- On completion of the transaction everyone who will be an owner of the home is considered an applicant.
- Applicant(s) must be at least 18 years of age at the time of making an application for the Grant.
What kind of property can I purchase?
It can be a new single dwelling, duplex, flat, apartment, townhouse etc. Any fixed dwelling that is suitable as a residence. The Grant is not available for renovations to an existing building or for the purchase of vacant land.
How do I apply?
Your Bernie Lewis Home Loans Mortgage Broker will assist you to complete and lodge an application form with the relevant financial institutions, or RevenueSA.
You are only able to complete and lodge an application form with an approved FHOG participant where you are borrowing funds from that participant, as part of buying or building your home. You need to apply within twelve months of completing the transaction.
Government Grants SA 2019
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Call us today on (08) 8300 8300 to discuss your options.
This information is general in nature and does not take into account your personal circumstances.
*Comparison rates are based on a home loan of $150,000 for 25 years. WARNING: Comparison rates are true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in different comparison rates. Bernie Lewis Home Loans’ service to you is free, when it comes to assessing the suitability of lenders’ products. Lender's term's conditions, fees, charges may apply. Full details are available through your Mortgage Broker. Associated fees and charges will vary depending on the Lender, the Product, and your individual circumstances.