If you’re buying a home for the first time, we’d be happy to discuss your options and help you find the right loan for you. So you get into your first home sooner – with minimal pain or fuss.
- How much can I borrow?
- What deposit will I need?
- Do I qualify for the government’s First Home Owners’ grant?
- What are my repayment amounts?
- How can I budget for a home loan?
- What are my obligations as a borrower?
How much can you borrow mostly depends on your current household income and what monthly expenses you have, this includes credit card limits and other debts you have.
There are other considerations the lender makes including Credit history, number of children you have, term of the loan e.g. 25yr - 30yr loan, being self employed or how long you have been employed by your current employer.
If you pass the lenders general criteria points I made above it then determines your borrowing limit, Lenders use what is called the debt-service ratio - the ratio of loan repayments to your gross income.
To discover your borrowing potential Access One can find out for you with our Mortgage Comparison Report.
Traditionally, you've needed at least 20% deposit to get a Home Loan. But now days it's more common for a 5% deposit. This deposit can come from family or friends but most lenders will want you to at least show 6 months’ regular savings history of the deposit.
Also, you’ll need the other costs in buying a home e.g. legal fees, stamp duty and possibly a one-off Lenders Mortgage Insurance fee (if you are borrowing more than 80% of the property value).
The First Home Owners Grant can also in some cases goes towards the deposit but more commonly pay for those other expenses listed above like stamp duty and legal fees etc.
Access One can can help you in outlining all your costs in purchasing a home and then structure a savings plan for your deposit and organise the first home owners grant when needed.
The First Home Owners Grant "FHOG" is available to people buying or building their first home and who meet the following criteria:
Each applicant is a natural person (ie not a company or trust.)
At least one applicant must be a permanent resident or Australian citizen.
Each applicant must be at least 18 years of age.
All applicants have not owned a residential property, jointly, separately or with some other person, in any State or Territory of Australia before.
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.
How do I apply?
Access One has all the relevant applications for all states for the FHOG when
completing the lenders application we fill out the FHOG Application as well and
submit it with the lenders application.
When will I receive the payment?
- For the purchase of an existing dwelling, payment will be made at settlement.
- For a building contract, payment will be made on the first progress payment.
- For an owner-builder, payment will be made on certificate of
occupancy/completion.
Your question should not be 'How much can I borrow?', but 'How much should I borrow?'. And only you can ultimately make that decision.
To learn more, talk to an Access One loans manager to discuss what you can afford then we can help plan your budget. Or check what the repayments will be using our handy repayments calculator.
Now you know what your repayments might be try saving that payment into a savings account. Use this as a dry run for having a home loan, you will soon see if the repayment will put to much stress on the household budget. Also take into account a few interest rate rises so putting a little extra is a good idea too.
Secondly that saving can be used as part of your deposit or go towards your costs when it's time to get a home loan for real.
Remember buying a home should be done with careful consideration. When you borrow money from a lender you enter into a contract to repay the debt on a regular basis, and failure to do so can not only affect your current situation but your future ability to buy not only a home but anything else requiring finance.
If for whatever reason you do run into problems with repaying your debt on a regular basis your lender should be the first to know the last thing you want to do is not talk to your lender about the issue. In most cases you can work out a repayment solution.
Want to make a really informed decision? Be armed with as much relevant information as possible before making your big decision? You can access extensive research on both real estate and finance in general through Access One, and it’s free. If you are considering purchasing call Access One 1300 722 278 or get a free Mortgage Comparison Report which will outline everything you need to buy your first home.
Or contact our home loans manger for a no obligation appointment
