Common questions for home buyers:
1. How much money can I borrow?
We’re all unique when it comes to our finances and borrowing needs. In our initial meeting we can help with calculations based on your circumstances and show you the options you have. There are ways of increasing your borrowing power and many options to choose from. You can use our online Borrowing Power Calculator for a rough indication of the direction you are heading.
2. How do I choose the loan that’s right for me?
Our blog Different Loan Features helps explain and identify the pros & cons for the main home loan options. However there are hundreds of different home loans available on the market, so feel free to give us a call to let us help you work through your options.
3. How much do I need for a deposit?
Usually between 5% – 10% of the value of a property, which you pay when signing a Contract of Sale. Speak with us to discuss your options for a deposit. You may be able to borrow against the equity in your existing home or an investment property.
4. How much will regular repayments be?
You can use our Repayment Calculator for an estimate. Because there are so many different loan products, some with lower introductory rates, this calculator is just a rough estimate. You can get an idea of your repayments in your first meeting.
5. How often do I make home loan repayments — weekly, fortnightly or monthly?
Most lenders offer flexible repayment options to suit your pay cycle. Aim for weekly or fortnightly repayments, instead of monthly, as you will make more payments in a year, which will shave dollars and time off your loan.
6. What is the First Home Owner Grant and can I get one?
This is a grant available to Australian citizens or permanent residents who wish to buy or build their first home, which will be their principal place of residence within 12 months of settlement. You can find out more details here. If you have any questions we are happy to help.
7. What is the First Home Super Saver (FHSS) Scheme?
The FHSS scheme is designed to assist Australians in buying their first home. The FHSS scheme allows you to save for your first home inside you superannuation fund which takes advantage of the lower-taxed super system. Individuals could potentially save $6,000 and couples could potentially save $12,000 more than if they had saved in a standard deposit account. Visit the ATO website to learn more about this scheme and how to navigate it correctly. If you have any questions we are happy to help.
8. What fees/costs should I budget for?
There are a number of fees involved when buying a property. To avoid any surprises, the list below sets out all of the usual costs:
This is the big one. All other costs are relatively small by comparison. Stamp duty rates vary between state and territory governments and also depend on the value of the property you buy. You may also have to pay stamp duty on the mortgage itself. To find out your total Stamp Duty charge, visit our Stamp Duty Calculator.
Generally around $1,000 – $1,500, these fees cover all the legal rigour around your property purchase, including title searches.
This should be carried out by a qualified expert, such as a structural engineer, before you purchase the property. Your Contract of Sale should be subject to the building inspection, so if there are any structural problems you have the option to withdraw from the purchase without any significant financial penalties. A building inspection and report can cost up to $1,000, depending on the size of the property. Your conveyancer will usually arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
Also to be carried out before purchase to ensure the property is free of problems, such as white ants. Your Contract of Sale should be subject to the pest inspection, so if any unwanted crawlies are found you may have the option to withdraw from the purchase without any significant financial penalties. Allow up to $500 depending on the size of the property. Your real estate agent or conveyancer may arrange inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
Most lenders charge establishment fees to help cover the costs of their own valuation as well as administration fees. We will let you know what your lender charges but allow about $600 to $800.
Don’t forget to factor in the cost of a removalist if you plan on using one.
Mortgage Insurance costs
If you borrow more than 80% of the purchase price of the property, you’ll also need to pay Lender Mortgage Insurance. You may also choose to take out Mortgage Protection Insurance. If you buy a strata title, regular strata fees are payable.
You will need to include council and water rates along with regular loan repayments. It is important to also take out building insurance and contents insurance. Your lender will probably require a minimum sum insured for the building to cover the loan, but make sure you actually take out enough building insurance to cover what it would cost if you had to rebuild. Likewise, make sure you have enough contents cover should you need to replace everything if the worst happens.