Buying your first home is exciting but it can also be daunting if you don’t know where to start. We know it can feel overwhelming when you get so much advice from well-meaning family and friends. As expert mortgage brokers, we’ve seen it all! We have put together our ultimate guide for Brisbane first home buyers to steer you in the right direction.
Setting a budget – first time buying a home
The first mistake many first home buyers make is setting a budget from the available property market prices they are researching instead of figuring out how much they can afford. This is a sure way to feel disappointed and like you are failing at this whole home-buying thing. Set yourself up for success and talk to an experienced mortgage broker first.
Knowing your current borrowing power is an important tool to setting a budget. You’ll either know how to search for the right property price range, or your expert mortgage broker can help you with a plan to get you into your dream home as soon as possible. Either way, talking to a mortgage broker before anything else will set you on the right path.
Mortgage brokers have a legal duty to work in your best interests and will advise you every step of the way to help you on the path to achieving your property goals.
What deposit do you need for a home loan?
Lenders like to ideally see home buyers have savings amounting to a 20% deposit. It is possible to get a home loan with a deposit as little as 5%, though. If your deposit is less than 20% of the purchase price you may have to pay Lender’s Mortgage Insurance (LMI), which can be rolled into the loan. LMI protects the lender in case you default on your loan.
Extra costs of buying your first home
As well as saving your deposit, there are a number of costs you need to factor into your budget for a buffer. These can include:
- Pre-purchase building and pest inspections
- Legal fees with a conveyancer or solicitor
- Stamp duty if not exempt
- Council rates each quarter once you own the property
- Strata fees if you buy somewhere with a body corporate
- Home and contents insurances – usually required by the lender as a condition of your mortgage
Can I get a grant for that? Grants and incentives for Brisbane first-home buyers
For Brisbane first home buyers you may be eligible for the following grants and incentives in Queensland:
- No stamp duty on property less than $500,000, or vacant land less than $250,000
- Discounted stamp duty on properties under $549,999, or vacant land under $399,999
- $15,000 grant for new properties under $750,000
All Australian first home buyers are also eligible for the First Home Super Saver Scheme. The scheme allows first home buyers to make up to $30,000 in voluntary super contributions to save for a home – limited to $15,000 each financial year.
How to get a home loan
If we can give you one piece of advice to set you up for success… it is PRE-APPROVAL! Don’t waste your time looking for property before you know exactly how much you can borrow.
Pre-approval means a mortgage broker has helped you with an assessment of your income, debts and liabilities, advised you of your maximum borrowing power and matched you to the most suitable loan and lender. Once you gain pre-approval from your lender, you can confidently look for your dream home, knowing your maximum offer limit and that you can gain the finance approval needed to proceed to settlement.
Once you’ve found a property and had your offer accepted, you can proceed to your formal home loan approval. Your mortgage broker will advise you every step of the way and liaises with the lender for you.
Where to start and how to find the right house
When you have your pre-approval sorted, it’s time to find your home! There are a few ways to do this but we generally recommend starting with a checklist of all the features you would like your home to have. Include number of bedrooms, bathrooms, parking areas as well as features that would be nice to have.
Research suburb market profiles that match your budget and search online with filters for your “must-haves”. If not much is coming up in your searches, you may need to revisit your must-haves to bring down the price range to suit your budget.
Once you are finding properties that match your wishlist and your budget, make enquiries about inspections and get ready to make an offer!
What should you do after reading this article?
Mortgage brokers deal with home loans every day from hundreds of available lenders. We know the most up to date information you need to secure your first home sooner. So, if you are reading this article, you are ready to chat! Contact us today and let’s get you that home loan.
