First Home Buyer FAQS
How much can I borrow?
How much you can borrow, also known as your borrowing capacity, will depend on how much of a deposit you have, your current income and what expense commitments you have.
It will also vary from lender to lender. First Choice Mortgage Brokers will give you a complete individual assessment when we discuss your options.
How much will I need to save for a deposit?
The deposit required depends largely on the type of home loan and, of course, the lender you select.
As a general rule, if you are planning to live in the property then you requireto have generally 5-7% of the purchase price as a deposit.
How much money will I need to set aside for stamp duty?
Stamp duty is a tax levied on the purchase of a property. It is calculated according to the purchase price of the property and the state or territory of the property location.
What other expenses will I need to pay besides mortgage & stamp duties?
As a rough guide, you should budget for between 5 of the purchase price, in addition to your deposit, to cover fees and charges. While mortgage and stamp duties will make up the bulk of this 5-7%, the balance may include;
- Building and pest reports
- Valuation fees
- Lenders mortgage insurance (LMI)
- Solicitors fees
- Utility connection fees – phone/gas/electricity
- Council and water rates
- Removalist costs
What is Lenders Mortgage Insurance?
Lenders Mortgage Insurance (LMI) premiums are payable by the borrower when the amount borrowed is above a certain percentage of the lender’s valuation of the property.
Majority of lenders will allow you to include the LMI premium to your home loan amount and others may require you to pay it up front. It’s important to note that the LMI does not protect you in the event that you are not able to make your mortgage repayments; LMI protects the lender from any losses resulting from late or unpaid loan repayments.
Contact First Choice Mortgage Brokers to find out more about lenders mortgage insurance.
How do I choose which home is best for me?
The Australian Mortgage market can be a perplexing web of options, home loan interest rates, lenders and products. Here atFirst Choice Mortgage Brokers we know it can be a difficult decision for a first home buyer to navigate through the various decisions onyour own.
Our specialist mortgage team are here to assist you throughout the entire home loan process. For more information please contact First Choice Mortgage Brokers on 1800 111 455to speak with a home loan specialist today!
Means that act of repaying a loan in regular payments over a period of time
Fee’s that the lender may charge either on the submission of the loan or at settlement
The amount of unpaid loan repayments
Real estate, cash savings, shares and other good will items owned by an individual
A short term finance contract that bridges the gap between an individual’s existing property to a new property
Capped Rate Loan
A loan where the interest rate is capped at a specific amount and not to increase above this benchmark rate
Certificate of Title
A certification issued from a government body, usually the states lands and titles office which has the properties lot and plan number, encumbrances are registered
A type of title which allows a company to own the property and an individual can by shares in the company which allows the individual to occupy the property
Can impose conditions and restrictions on a property
Cross collateralization is a method used by lenders to add more security to a loan transaction. It is accomplished by the lender placing a lien on another property in addition to the property that is the subject of the loan. Having more collateral reduces their position of risk.
The difference between your loan amount and your property value for example – if your home is worth $500,000 and your home loan is $300,000 then your equity is $200,000
An interest rate that is fixed at a specific amount
Loan to Value Ratio
The ratio between the loan amount and the valuation of the security
The borrower taking a mortgage over the property
Generally this type strata title is relevant to the buildings on the lot where as a Torrens type title is comprises of land and the accompanying buildings.