First-Time Home Buyer Loans
Low % Deposits Available
Access Government Grants & Schemes
Stamp Duty Exemption or Concession
What Is a First Home Buyer Loan?
This is a home loan or mortgage given to a borrower who has never previously purchased a property ie. it is their first home.
What should you expect when you’re buying a home for the first time? It can seem quite daunting to the uninitiated, but in reality, it’s quite a simple process. 95% of us will be seeking a first-time home loan to get the capital we need to purchase the property. The other 5% of us will have the money outright to purchase the home, but this reading isn’t for those lucky few!
“As first-time home owners, we were so nervous venturing into a mortgage, but VIP Finance Brokers made the whole process so simple and stress-free. They worked out our borrowing capacity and made our dream purchase possible.”
What Should First Home Buyers Look For In a Loan?
It definitely pays to shop around when looking for that first loan! The best way to start the process is by checking your Equifax credit score to give you a rough estimate as to your creditworthiness. This number will give you an approximation of what kind of lending rates that you’ll be offered in your home loan.
You should always look for the lowest rates that you can when searching for your home loan. Our free service can provide you a list of all the current loans and rates throughout Australia.
Comparing Interest Rates
Interest rates can seem pretty innocuous, just numbers on a page, what’s the big deal? Interest rates play a big part in how much money you’ll be paying on the life of the loan. If you’re just lending your friend 20 bucks for a few days, sure…it’s not a big deal at all, interest rates aren’t even factored in. But when you’re paying on a house for 30 years, the interest can really add up over time!
The good thing with the internet these days is that you don’t need an abacus or a slide-ruler to figure out the interest payments. You can use handy tools such as a mortgage calculator to enter in your numbers such as credit score, principal of the loan, and how long the loan will be to get an accurate picture of your monthly payments.
There are many options made available to your mortgage as a first home buyer and you can compare features of home loans that are applicable to your personal situation. These can include:
- Interest rates
- Loan & lender fees
- Ability for additional repayments
- Redraw facility
- Offset account
- Split loan facility
- Top up facility
- Customer service
You can ask us to show and compare your full range of loan options available as first time home buyer.
What Is The First Home Loan Deposit Scheme?
First devised by the Australian Government to help facilitate loans for first-time home buyers, the First Home Loan Deposit Scheme is a great way for first-time homebuyers with little money for a deposit to get a home loan.
This option is also advantageous for those first-time buyers looking to sidestep mortgage insurance premiums which can get pretty pricey.
The scheme is a government plan that secures the home loan of eligible low-middle income earners with a low deposit of 5% of the property’s value. It can also help avoid paying Lender’s Mortgage Insurance premiums.
There are price limits that apply to properties that can be purchased and only certain lenders are able to offer loans under the scheme.
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Frequently Asked Questions
How much can I borrow?
Your borrowing power is heavily based upon your creditworthiness in the past. This credit rating is based upon your credit score which is the Equifax score. There are a lot of factors that go into the scoring of this system; items such as missed payments, late payments, amount owed etc. The best course for maintaining a good score is to always make your payments on time and never borrow more than you can afford to pay. The debt-to-Income ratio is also looked at by lenders when determining how much money you can borrow. Always keep this ratio as low as you can which will give you the best chance to borrow the most money when you need it!
What loan is right for me?
This question can’t be fully answered as it’s not a blanket statement answer to give. The type of loan that’s right for you is dependent upon many factors. What does your financial situation look like? How high is your credit score? Is this your first time purchasing a home? How much money do you have for a down payment on the loan? Do you want consistent payments in the form of a fixed-rate loan? Or do you feel that the prime rate will be lower in the future and desire a variable rate loan? The scenarios are almost limitless to ponder.
How much will the repayments be?
The amount of the repayments are based upon a wide range of factors. Your credit score weighs heavily on the terms and conditions of your loan. The lender decides how long the loan will be in terms of time and the interest rates levied on the loan. These two items along with your creditworthiness will sketch out the form of your monthly payment.
How often are first home loan repayments?
First home loan repayments are done on a monthly basis for the life of the loan. You can ask for a payment to be skipped and placed on the back end of the loan in cases of hardship.
Stamp duty? What is this and do I need to pay it?
Stamp Duty is a mandatory tax that is levied by both the Australian Government and the Australian State that the property resides. This tax is generally based upon the value of the home when purchased. As a general rule, the more expensive the property, the more in Stamp Duty that you will owe when you purchase the home. Dependent upon the state, first-time home buyers will be exempt from this Stamp Duty charge
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