So you want to purchase your first home.

Purchasing your first home is an incredibly exciting milestone!

But...

It also comes with significant financial considerations.

Before diving into the property market, how can you prepare for that all important major life decision?

Understand how much you can borrow

Before you get your heart set on that 5 bedroom, beachside dream home take some time to understand what your position really is in terms of how much a bank will lend you.

This depends on several factors

- your income

-Expenses

- Debts, and credit history

Lenders assess these factors to determine how much you can borrow. You can use online mortgage calculators to get an estimate, but speaking with a mortgage broker (Like me!) will give you a clearer and more accurate picture.

Save for a Deposit

Most lenders require a deposit of at least 5-20% of the property's purchase price. The higher your deposit, the better your mortgage terms will be. If your deposit is below 20%, you may need to pay Lenders Mortgage Insurance (LMI), which protects the lender if you default on your loan.

How do you Score?

A good credit score improves your chances of securing a mortgage with favourable terms. Obtain a copy of your credit report and check for any errors or outstanding debts that need to be addressed before applying for a loan. There are services available to help should you need it, we are always happy to refer you to a trustworthy service.

Have a Budget for Additional Costs

Buying a home involves more than just a deposit and loan repayments. Factor in additional costs such as:

• Stamp duty (varies by state and property price)

• Legal and conveyancing fees

• Building and pest inspections

• Loan application fees

• Moving costs

• Council rates and home insurance

What help is Available?

Australia offers several incentives for first-home buyers, including:

• First Home Owner Grant (FHOG): A one-time grant available in some states.

• First Home Guarantee (FHG): Allows eligible buyers to purchase with as little as a 5% deposit without paying LMI.

• Stamp duty concessions: Available in some states for first-home buyers under a certain price threshold. Check with your state government and a mortgage broker to see which schemes apply to you.

Get Pre-Approval for Your Loan

Loan pre-approval gives you a clear idea of how much you can borrow and shows sellers that you're a serious buyer. This process involves submitting financial documents to a lender who will assess your eligibility and provide a conditional loan offer.

Plan for Repayments

Your mortgage repayments will be a significant part of your monthly budget. Consider different loan options, such as fixed or variable interest rates, and use a repayment calculator to estimate your future financial commitments.

Seek Professional Advice

Navigating the mortgage process can be complex. A mortgage broker can help you compare loans, access government grants, and secure a deal tailored to your needs. Additionally, financial advisors and solicitors can guide you on legal and financial matters.

Buying your first home in Australia is a big financial commitment, but with careful planning and preparation, you can make the process smoother and more rewarding. Start saving early, understand your options, and seek expert advice to set yourself up for homeownership success.

Need guidance on your home loan options? Contact your friendly mortgage broker

(That's me!) today to explore the best financing solutions for your first home purchase!

Rielle Berglund

0428 889 893

info@matildatreefinance.com.au