I’m a first home buyer, where do I start?

September 12, 2019

It’s a question we hear all the time at Newy Finance, and it comes with a mixture of excitement, fear and anticipation.

I would like to buy my first home, where do I start?

If you are looking to take your first step into property ownership, there are many incentives, perks and breaks available that can really help make your dream a reality.

As your local specialist for home loans and trusted Mortgage Broker in Newcastle, Newy Finance is here to help. Here are our best tips for purchasing your new home.

Save as much for a deposit as possible

Everyone carries on about the importance of a large deposit, but is it as important as everyone says?

The answer is YES! The more you have saved, the less you have to borrow and the easier it is to borrow.

A good deposit can save you money and possible rejection of your home loan application. Particularly in the unit market. In the current, flooded market, lending for units is high risk for banks. Property prices are dropping, and banks can refuse funding if the deposit is not enough to cover potential losses.

A deposit of 20% of total purchase price is ideal. Banks see home loans with deposits of less than 20% as higher risk and charge an additional insurance to cover any potential losses they may face. This is called Lender’s Mortgage Insurance (LMI) and it can cost you money, so avoid paying it if you can. There are incentives that can help also.

Take advantage of Government incentives

The following applies for first home buyers in New South Wales. Jon can help with further details.

First Home Owner Grant

If you are building a new home up to $750,000 in value or buying a ready-built new home up to $600,000 in value, you could be eligible for the $10,000 First Home Owner Grant. This can form part of your deposit, or simple reduce the amount you need to borrow.

Stamp duty exemption

This one has been around for a few years and has helped many first home buyers enter the market. First home buyers are exempt from paying stamp duty on their home purchase up to $650,000 in value. If you have fallen in love with a home above this price, don’t stress, there are also stamp duty reductions on homes up to $800,000 in value.

Keep in mind…

To be eligible for incentives, there are some conditions. You must live in your home for at least 6 months in the first year of owning it (unless you work in the Australian Defence Force) and this must be your first home (no double-dipping).

Hunter River in Maitland, NSW, Australia

Know your budget

Know how much you can and can’t borrow. Know what you can and can’t afford. Shop within your means.

While it’s common to like what you can’t afford, and with low interest rates, it’s easy to overstretch yourself, avoid the temptation!

Keep in mind interest rates may go up, so be prepared. Give yourself a buffer so when rates do rise, you won’t be left eating bread and baked beans just so can pay your mortgage.

Speak to an expert

Experts such as Newy Finance know the finance market, the current environment and incentives, and are here to help.

If you have any questions on home loans, check with your local mortgage broker Jon.

Newy Finance are experts in home loans and can also help you with a wide range of additional services.

Ready to partner with Newy Finance?

  • We are local and can come to you.
  • You’ll speak with Jon, every time.
  • We perform the entire process for you.
  • We offer after settlement support.
  • We take real good, long term care of our clients.

Call us on 0410 699 969 or through our contact page.