First Homebuyers' Guide

Buying or building your first home is one of the most exciting experiences of your life. We can help you through every step, including applying for any Government assistance for first homebuyers. Here are the answers to the common questions we get asked by first homebuyers. For more detailed information talk to one of our friendly lending staff on 1300 721 253 . 

How much can I borrow?

Generally we lend up to 95% of the property value. To get a rough idea of how much you can borrow, you can visit our Borrowing Power Calculator.

Do I need to have a deposit?

For your own protection, we prefer that at least 5% of the purchase price comes from your genuine savings. These may be funds you have saved, funds held in an account in your name, share holdings or managed funds. In all cases you need to have had them for three to six months. An unconditional gift can also be used subject to certain conditions.

Tip: Each month start putting aside the amount you would pay in new loan repayments after taking out rent (if you are paying it). This will get you used to paying our proposed mortgage and will show us that you can meet your new commitment. Visit our Budget Planner and Savings Goal Calculator.

What is Lenders Mortgage Insurance (LMI)?

Any time you borrow more than 80% of the value of the property, we require you to pay a one-off premium for Lender's Mortgage Insurance (LMI). The premium can be added to your loan in most cases.

What are the other costs?

You will need to allow around $2,500.00 to cover professional legal fees, property searches, legal disbursements and house insurance. The exact amount will depend upon your circumstances and the property you purchase.

Is there Government Assistance for First Home Owners?

Yes. The schemes have recently changed in NSW. For more information about whether you are eligible for assistance ask our staff or visit the Office of State Revenue websites in your State.

NSW - www.osr.nsw.gov.au
ACT - www.revenue.act.gov.au
QLD - www.osr.qld.gov.au

We can help you with your application for any First Home Owner Grant.

Should I get preliminary approval before house hunting?

Yes, because then you know how much you can borrow and look at houses or apartments in that price range.

Fixed or variable rate home loan?

We can help you to decide which type of home loan is best for you. Variable loans give you more flexibility. When interest rates rise your repayments will rise but if rates fall your repayments will fall too. Fixed rate loans are good if you want certainty in your repayments but you don’t benefit if rates fall. You may not have as much flexibility in making additional repayments.

How do I find the right home?

Make a list of features you want in your home (eg number of bedrooms, bathrooms, garage or yard). Decide which suburbs you would like to live in. You can then research homes online or approach a real estate agent. Once you have found your ideal home or apartment we will send a registered valuer out to value the property before we formally approve your loan.

What if I am building a home?

It is a good idea to have a larger deposit when building your own home as building costs can often be more than the initial quote. We may initially approve a loan for the land only with a view to getting a loan to build at a later date.

What is the legal process?

• You can handle the legal aspect of buying a property yourself but we recommend you engage a solicitor or licensed conveyancer.
• After the vendor (seller) has accepted your offer you may need to pay a holding deposit to the real estate agent before any formal exchange of contracts (NSW).
• Discuss the contract with your legal expert and wait for the formal loan approval before you sign the contract.
• When you exchange contracts the vendor becomes legally bound to sell the property to you and you are legally bound to pay for the property by a certain date. In NSW the law provides the purchaser with a five business day cooling off period after the exchange of contracts. This can be waived if mutually agreed upon.
• At the exchange of contracts you generally will need to pay a 10% deposit. If you are borrowing more than 90% of the purchase price, or have your funds tied up until settlement, we can help arrange a Deposit Power Guarantee (Deposit Bond).
• If you are buying a house rather than a unit or a townhouse, you must have your home insured adequately at all times. Insurance must be in place prior to settlement. We can offer you up to 90 days free insurance cover on the property you are buying prior to settlement, which gives you great peace of mind at no cost. It is not compulsory but we strongly recommend you insure the contents of your home too.
• In NSW, once the contracts have been exchanged and your cooling off period has expired it takes about four to six weeks to move to settlement. In Queensland it is usually five weeks. You should sign a transfer of land document at least two weeks prior to the settlement date. This document will be handed over at settlement to The Greater. We will then register it at the State's Title Office on your behalf. Upon registration, the property will be changed over to your name.
• And you will be a proud home-owner!

Tip: Pay weekly or fortnightly to save interest and pay your loan off faster

Make your repayments weekly or fortnightly, rather than monthly and you will save a lot of interest over the years. You can reduce a 30 year loan term by around six to seven years. You can generally redraw any amount you are ahead on your loan via our free internet redraw facility.