Buying your first home involves a lengthy process of searching, researching and shopping around. Once you have an idea of what your ideal home looks like, the next step is finding the perfect home loan to match.
Luckily, you can get a little help from Australian lenders, as many of them offer specially-tailored home loans for first home buyers, particularly home loans with low ‘honeymoon’ rates, or with reduced features and lower fees.
Also helpful is the fact some state governments offer concessions on stamp duty, while (at the time of writing).
While buying your first home is certainly no easy process, by seeking the right assistance, asking questions and carrying out your own thorough research you can achieve your dream of buying your first home.
Lenders targeting first home buyers will often offer a discounted interest rate over the course of a ‘honeymoon’ period, which is usually the first 6-12 months of the mortgage. However when the honeymoon period is over, the home loan’s rate often reverts to a standard variable rate, which is generally higher than the average standard variable rate on the market.
Given the broad range of available home loans for first home buyers, it is important to do your research before signing up for one.
Lenders mortgage insurance
Here’s a tip: if you have a small deposit (less than 20 percent of the purchase price), some lenders will charge lenders mortgage insurance. The insurance offers you, the borrower, no protection, but rather is designed to protect the lender should you default on your home loan.
Potentially costing thousands of dollars (depending on your deposit and the purchase price), lenders mortgage insurance can be a substantial added cost of home ownership.
Saving a sizable home deposit on your home loan can help you avoid or reduce paying lenders mortgage insurance when you take out your first home loan.
State government funding
Some state governments offer concessions on some taxes such as stamp duty. For more information about up-to-date concessions and grants visit your state revenue office’s website for all the details.
Finally, before you sign up for a home loan compare many home loan products to make sure you find one with features that will benefit your individual circumstance and needs. To crunch the numbers use the RateCity mortgage repayment calculator.