In recent months lenders have put more requirements on first home buyers to have at least 3% of the property value saved over a period of 3 – 6 months. This can equate to approximately $10,500 on a property worth about $350,000. Whilst this puts a bit more pressure on first home buyers, it also helps in the long run to reduce the amount needed to complete the purchase of a property and thus saving interest on the life of the loan.

Getting Started

So how do you get started…

Step One: Research
If buying your first home feels a little scary, don’t worry. Do your research first and you’ll feel much more comfortable and avoid unnecessary mistakes. Check the property prices by location. You can do this by checking out the real estate sections in newspapers and magazines or even visit web-sites such as realestate.com.au and domain.com.au. Talk to real estate agents in the areas where you’d like to buy. Speak to friends and family who have bought property. Do not be afraid to ask questions! Maybe by going to open homes and auctions you will become familiar with the process.

Step 2: Your deposit and affordability.
Saving for your deposit is one way to prepare you to get into the routine of repaying a mortgage. Start to save as soon as you can and minimise drawing the savings to pay for consumer items. These days you need a minimum of 3% to get you going.

Aside from the purchase price of your new home, you may need to pay for things like stamp duty, legal fees and mortgage insurance. If you’re eligible for the First Home Owner’s Grant, you can use it to cover costs or add to your deposit. Stamp duty is the biggest expense after your mortgage and varies from state to state.

Once establishing how much the transaction will actually cost we need to work out how much you can afford to borrow. This is a quick process however may only give you an approximate amount as we need to verify your information with payslips and/or tax returns.

Step 3: The pre-approval process.
Once we have an idea of how much you can borrow, we recommend getting your finance sorted. We explain all the options you can get with home loans and we analyse your banking habits. By getting to know how your money moves, we can then recommend an appropriate strategy to pay off your loan as quick as you can.

We then recommend an appropriate lender who will also accommodate your personal situation as well as the features you need on your loan. From here we put together an application and, together with your supporting documents, will submit it to the lender for consideration. Once we have negotiated the approval, you can move onto the next step.

Step 4: Finding the right place.
Once you’ve found the home, just give us the real estate agents contact details and we can commence the financing process for you. You will also need to employ a solicitor to help ou buy the property. It is the solicitor’s role to make sure the property is not affected by anything you are unaware of, e.g. pests, government interventions etc. They will also protect your interests when dealing with the seller.

You will need some money here to put a deposit on the property. If you haven’t got access to your deposit because it is invested somewhere else or is tied up in another asset, we can arrange a deposit bond for you which will allow you to exchange contracts with the seller. This deposit bond will require you to hand over the deposit at the time of settlement.

Step 5: Signing the mortgage documents.
This is the part where you sign off on the mortgage and the loan contract. Your solicitor may want to review the documents and make sure you got exactly what you asked for, or at least thought you wanted. Once this stage is complete the lender will be ready to release the money to the seller (this is known as settlement).

Once the property has settled you will be given the keys ready to move in.

More information can be found in our free guide to buying a property which can be downloaded here (Your Home Buying Guide).