How to Get a First Home Buyers Loan - Alpha 1 Financial Solutions

How to Get a First Home Buyers Loan

How to Get a First Home Buyers Loan

Due to the Australian Government’s first home owners grant, various other government subsidies and a range of new discounted 100% first home buyer loans, it’s easier than ever to buy your first home without a deposit.

Below we’ll detail the steps require so you will know how to get a first home buyers loan.

Do You Require Finance From Your Parents?

Here’s an interesting fact:  60% of first home buyers receive some sort of financial assistance from their parents.

If you are a first home buyer, here are the two two primary ways that your parents can assist with your first home purchase:

Guaranteeing your loan: Your parents can offer an investment item, such as their home, as additional security for your loan. You can borrow up to 110% of the property value from the banks with no LMI and a low interest rate.

A gifted deposit: Up until now, most lenders required proof of genuine savings, which is to how you saved for your deposit. The reason being is if you can save money, you can repay a loan. However in current times, lenders will accept your loan application without requiring proof of genuine savings.

The key takeaway here that without a guarantee from your parents, you will not be able to qualify for a no deposit loan.

How Can I Make The First Home Owners Grant my Deposit?

Put simply, you can use the First Home Owners Grant as your deposit.

However in most cases, the total deposit amount is not enough.

An important piece of information to know: you will not receive the grant until construction has commenced if you are building your first home.

For most cases, you will need 5% to 10% of the purchase price in total, including the First Home Owners Grant .

A good thing to know is if you are a guarantor, you will not require  any savings at all.

So How Does a No Deposit Loan Function?

No deposit loans allow you to borrow up to 100% of the total purchase price.

The most common deposit loan type is known as a guarantor loan.

Guarantor loans come with all the normal loan benefits, including:
– 100% offset
– Fixed interest rates
– Interest only periods

Most people are eligible for discounted interest rates, basic loan packages and fee waivers for loan applications.

Will I be Required to Pay a Higher Interest Rate?

Contrary to what you many be thinking, you will probably receive a discount on your interest rate.

Thanks to the added security offered by your parents, the outcome is lower risk compared to somebody borrowing 95% of the total property value.

You will be considered as a highly sort-after borrower if your income job and credit history are all acceptable for the banks.

Since the banks are acknowledging the value of first home buyer loans, they offer a range of discounts on their interest rates, loan approval fees, application and valuation fees.

How Much is the First Home Owners Grant?

The First Home Owners Grant (FHOG) is a nationally funded scheme, The FHOG administered under separate legislations of different Australian states and territories.

Under the FHOG, a single grant of between $7,000-$15,000 is typically available to first home buyers.

It’s important to understand that some states have different grants.

We can help you apply for the FHOG when you apply for your First Home Buyers Loan with us.

The grant fund will be paid together with your loan at settlement.

Do I Get Any Other Benefits For Being a First Home Buyer?

The short answer is yes.

The state governments offer many exemptions and additional grants which you can take advantage of to buy your first home.

It is best that you source additional information regarding these benefits directly from your respective state government website.

What Other Costs Do I Need to Consider When Buying a Home?

There are many costs associated when buying your first home.

It is best that you discuss these costs with your mortgage broker or conveyancer before purchasing the property.

Here’s a list of some of the additional costs that you’ll need to account for when buying your first home:

Mortgage stamp duty:  A state government fee that is determined based on the amount you borrow. Most states waive fee this for first home buyers, or are in the process of removing this fee all together.

Purchase stamp duty: One of the most costly items associated with buying a home. Some states offer concessions on this cost for first home buyers. Our stamp duty calculator will help you figure out your first home concession amount.

Registration fees: A small fee of approximately $200 for registering the change of name on the property title and registering the new mortgage on the title.

Conveyancing / legal fees: Expect to pay between $700 and $1,500 for conveyancing costs for your first home purchase.

Lender fees: Lenders many charge a setup fees of up to $850. Other lenders may waive all the setup fees for your loan. Talk to us for your free First Home Loan Assessment and see how we can help you get the best loan.

LMI:  A major cost for buying your first home with no deposit. LMI starts from $0 for an instant loan up to 5.1% of the loan amount.

How to Get a First Home Buyers Loan

Call us now 1300 00 13 20, or fill out the form here to receive your free First Buyers Home Loan assessment.

Our expert First Home Loan Specialists will let you know if you’re eligibility to borrow, the amount you can borrow, and help you work out out if you need to save a deposit and what discounts you may be eligible for.