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Sarah discuss her journey to establishing Beyond Financial
12 Mins
Buying your first home can be both exciting and daunting at the same time. There are so many steps involved from having the idea to buy,all the way to settling a loan and getting keys to your new home. This can take months and months of hard work.
So what’s out there to help you achieve your home ownership goals faster?
One important aspect is knowing what incentives or benefits are available. Being a First Home Buyer (FHB) is unique and only happens to you once. This means you have one opportunity to take advantage of the relevant benefits that will help you own your home sooner.
Some examples are:
This is where the state government pays you a lump sum for buying your first home. Different states have different rules and requirements.You can check what they are on each state revenue office website depending on where you plan to buy.
The lump sum can be used towards your house deposit which reduces your saving time and you could buy earlier.
This is an incentive from the state government that reduces the cost of purchasing your first home. Normally the largest cost to buying a home is the stamp duty and each state charges different levels. You can check what concessions are available on each state revenue office website.
Some purchases mean you don’t have to pay any stamp duty at all. It can save you tens of thousands in costs and months of savings time allowing you buy earlier.
A federal level FHB scheme is the First Home Loan Deposit Scheme (FHLDS). This is where the government will guarantee up to 15% of your deposit and, with your own 5% deposit, make up the 20% deposit of a property purchase. Having that combined 20% deposit means you avoid paying Lenders Mortgage Insurance (LMI).
Only certain banks offer this scheme as part of a home loan application and the government has a list of restrictions on who is eligible. Spots are limited and they tend of run out fast when released. All details can be found on the National Housing Finance and Investment Corporation (NHFIC) website.
Again,this cuts time in saving that full 20% deposit and allow you to buy faster.
If you wish to borrow more than 80% of the value of the property, Lenders Mortgage Insurance or LMI is a large fee charged by the lender. This can be up to tens of thousands of dollars depending on the loan amount and it’s added to the loan which incurs interest as you pay it down.
Some lenders occasionally offer to waive this charge for borrowers in particular occupations or up to a certain loan amount.
If the LMI cost can be waived then you’ll be able to borrow more to purchase the property without incurring any additional cost. This cuts time in saving the 20% deposit.
Another option is to utilise an existing family property as your deposit rather than saving up cash. There will be a lot of numbers to workout ensuring it all fits nicely and you will need your family’s approval to use the existing property. The current owners of the property will be on the home loan as a guarantor and only certain lenders offer this loan structure.
If you are lucky enough to get the family support then you could potentially borrow for the entire property purchase right now and not have to wait to save up any deposit.
As you can see, there are many ways to cut the time it takes to save for a house deposit, or reduce the cost of purchasing a property to help you buy your home faster. Speaking to a finance broker is a convenient way to review what’s available and ensure you choose an option that suits your situation.
Feel free to chat with Sarah Zhou at Beyond Financial today about your first home buyer options.
