Buying your first home can be so exciting and slightly scary. So many questions, what is mortgage insurance? What’s the difference between variable and fixed? What is the better option for me, principal and interest or interest only? What’s a split loan? Here’s what you need to know.
Lenders’ Mortgage Insurance (LMI)
Don’t have 20% deposit? You can still get a loan but you will be required to take out LMI. This insurance protects the bank in case you default on the loan. There are two options to pay LMI, pay it upfront, or capitalize it into your mortgage.
You will need between 5-20% of your property’s value as a deposit. The bigger your deposit, the smaller your repayments & cost of LMI (Lenders Mortgage Insurance). The other option is for a guarantor loan, which enables you to borrow up to 100% of the property value.
Loan Application Fee
The home loan space is extremely competitive, most banks are waiving the application fee, depending upon which bank your loan is written though, this may vary. Your Mortgage Coach will discuss this further.
Legal / Conveyancing
You need a solicitor/conveyancer when you buy a property to complete the transaction, they will do important searches on your new property & even attend settlement to hand over new transfers. At Your Mortgage Coach we can recommend a conveyancer who can handle your new property purchase. Just ask the Coach!
The price of your property will determine how much you pay for Stamp Duty, Land Transfer Fees etc. The Coach will show you all relevant government fees.
Home & Contents Insurance
It’s important to take out home & contents insurance on your new property, most banks & lenders actually require it before settlement. Your Mortgage Coach can arrange a quote through our panel of insurers. Just ask the Coach!
Getting a building & pest inspection is recommended, you’ll want to make sure the property you’re buying is council approved, structurally sound & not full of nasty termites. We don’t recommend any building & pest inspectors, we believe you should search for a local, just make sure they are fully licensed and insured.
With all the hype of buying your new property, don’t forget to get utilities connected or transferred, otherwise, your first couple of nights might be by candlelight!
Your conveyancer should do a search on this and see what your council rates are and if any amendments are needed.
Each state has stamp duties payable on property purchases. Refer to links below for more information about your state.
Is there any government grants being a first-time buyer?
Each state has a different FHOG First Home Owner Grant. We have a JP (Justice of the Peace) who can help you apply for the relevant grant.
Have a look below at your relevant Office of State revenue for your state and see what First Home Buyer Grant and concessions you may qualify for;
- QLD www.osr.qld.gov.au
- NSW www.osr.nsw.gov.au
- WA www.dtf.wa.gov.au
- SA www.revenuesa.sa.gov.au
- VIC www.sro.vic.gov.au
- ACT www.act.gov.au
At Your Mortgage Coach, we can answer any questions you have about buying your first home. Contact us today.