What size deposit is required?

Usually first home buyers are required to have a minimum of 5-10% of the purchase price as a deposit. 

• Usually, you are required to have a minimum of 5-10% of the purchase price. Keeping in mind, loans under 80% loans will avoid Lenders Mortgage Insurance (LMI).
• Genuine savings Most lenders also require buyers to have genuine savings, if you are buying over 80%.  This shows you are able to be responsible with your finances long term and not just when applying for the loan.  Your spending habits are determined by the lender when they receive your bank statements dating back 6 months. To prove genuine savings you must have the funds in your account for 3- 6 months, if you are using these funds a deposit. Not all lenders require this, however most do. 

• Gifted Deposit If a family member gifts you the deposit funds, you are required to show a “gift letter”. This gives the bank certainty that the money gifted doesn’t have an informal loan arrangement between you and the family member as this will increase your expenses calculation. 
• Guarantor Loan/ Family Pledge loan  There is also the option for a guarantor loan, which utilities a family members/ trusted persons property equity to cross collateralize against your new purchase and will avoid LMI.  For example. if you purchase a new home for $500,000, then your deposit to secure a loan at 80% (and avoid LMI) will be $100,000. If your parents’ home is valued at $800,000 then the lender can hold your title of your parents’ home as well as the title of your purchase. This provides a sufficient security for the lender to allow you to avoid paying physical cash towards your purchase.

What fees are required when purchasing a home?

Rate Your circumstances will determine interest rates/ loan products available to you.

Usually, first home buyer's are looking to maximize their borrowing power. This may not result in receiving the lowest interest rate in the market, however the rates are normally within 0.10% of the lowest rate and therefore not a concern. 

For example, if the lowest rate is 2.15% Owner Occupied, another lender may offer you 2.25% with an increased borrowing power. Sometimes this increase can be as little as $10,000, however could be up to $100,000. 

When you’re a first home buyer, we will always advise you not to make rate-based decisions when working with a tight budget. 

Or simply, if this is an issue you are able to buy with a lower borrowing power and achieve a lower purchase price to access a different rate. 

We advise having a pre-approval at a lender that provides the most options. Once you have purchased, we will then review the market for the most suited mortgage for you, with the safety net of your pre-approval in place. 

What other fees can be expected? 

Government fees

•  Stamp duty The tax paid on a new purchase. Click here for more details on Stamp Duty. 
•  Transfer fee The fee charged by the government to transfer the title of your new property into your name.
•  Registration fees The Government fee to register your mortgage on the title of your property.

Other fees

•  Conveyancing  To facilitate settlement and ensure your being legally represented for your purchase.
• Normally, starting from $800 to $1,500 depending on the complexity of your purchase. With conveyancers and solicitors, we do not recommend hunting for the lowest price. Your first home is an important purchase,  ensure the best quality services to represent you.
•  Inspections Building inspections, pest inspection or strata title report usually under $500.
•  Home loan fees Depending on which bank is best to facilitate your property purchase, you may be required to pay an application fee, settlement fee or valuation fee. Ranging from no fees to $900.00 or more.
•  Lenders Mortgage Insurance  Borrowing over 80% of your property value requires Lenders Mortgage Insurance. This is a one-off insurance that protects the lender if you default on your mortgage. Loans over 80% are deemed higher risk and for this purpose insurance is required. 

Am I eligible for the First Home Owners Concession and/or Grant?

First Home Buyers need to meet a criteria of requirements to be eligible for the government grant. This can vary from state to state.

Here are the requirements: 

• You need to buy the property in your personal name and not as any other entity.
•  Approval will require at least one person on the property title to hold any of the following; Australian citizenship, New Zealand or permanent visa.
• 18 years or older.
•  The total value of the property must be below the cap amount. Each state has different property value cap's, so it’s essential you check the requirements with the state and your conveyancer.  
•  The purchase price must be bellow the governments indicated amount which is different in each state.
•  This must be the first time all applicants have purchased a principle place of residence.
•  At least one occupant must reside permanently in the home for the first 12 months.
• The Grant required the property bu either new (unlived in) or a build.