Posts Tagged ‘First Home Buyers’

Plan your New Year property purchase

Posted on Tuesday January 3rd, 2012 by Mortgage Choice
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Posted in Home Loans, Top tips for property & home loans | No Comments »
Plan your property purchase by speaking to a home loan specialist

Start planning your New Year property purchase

If owing a property is on your checklist for 2012, now’s a good time to start planning. As with any major purchase, the more research and preparation you do, the better chance you have of buying something that’s right for you.

Know your limits
Before setting off to find your dream property, it’s best to get an idea of how much you can afford to borrow and repay – so that you can be realistic in your search and not waste time on properties that could potentially be out of your reach.

There are plenty of online calculators that can help work out your borrowing capacity and repayments. However do keep in mind they provide an estimate only, so be conservative and leave yourself some financial buffers when using these tools. Remember to factor in other expenses as well, such as stamp duties and legal fees which could make a sizable dent in your deposit.

Be thorough when doing the property inspection
Attending open homes can be a hectic and stressful experience. Once you’ve managed to navigate to the six different properties (that all decided to open within the same 2-hour period on a Saturday morning), you then have about 10 minutes to look around before rushing off to your next destination. Amidst the chaos you might have overlooked some flaws or forgotton to check certain features, which could mean a second visit if you’re really keen on the place – provided it doesn’t get sold before that.

This is when it helps to have a property inspection checklist in hand, to make sure you look out for important features and flaws (e.g. smoke alarms, crakes / stains, fans / air conditioning etc); as well as to prompt yourself to ask the agent for some critical information about the property which may not be included in the brochure (e.g. rent and lease expiry date (if applicable), rates, security, insulation etc).

Shop around for the best home loan deal
There are many factors to consider when choosing a home loan. For example your borrowing limit may vary significantly between lenders which could be the difference between getting your dream home or settling for something less; also, some loans may have great interest rates but the features offered by another loan with higher rates might end up saving you more in the long run.

While it’s important to shop around, it’s also critical that you know what to look out for. Consulting a home loan specialist such as a mortgage broker is a stress-free (and cost-free) way to go about this.

Get your home loan pre-approved
A loan pre-approval provides a conditional approval of a loan amount, which can help you shop with confidence when negotiating on a property purchase or bidding at auctions.

Genuine loan pre-approvals follow a similar process to a full loan application whereby borrowers will be assessed on their individual circumstances and needs and are required to verify their identity and ability to repay the loan. Other conditions usually need to be met to move to full finance approval, such as a suitable property valuation.

Keep in mind loan pre-approval is usually a limited time offer, for a period of three to six months.

Here are 5 benefits of a home loan pre-approval:

  1. It prompts you to begin thoroughly exploring your loan options at the beginning of the property purchase process.
  2. Saves time (and lessens possible disappointment) by concentrating the property search in a feasible price range.
  3. Enables real estate/buyers agents to see you as a serious property buyer.
  4. Helps you gain confidence for bidding at auction or negotiating a purchase.
  5. Quickens the settlement process as the loan is already part of the way approved.

Useful links

What is pre-approval

Posted on Tuesday April 19th, 2011 by Mortgage Choice
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Posted in Home Loans, Top tips for property & home loans | No Comments »
David Coates

David Coates

By David Coates, Mortgage Choice in Brighton, Victoria

The particulars of pre-approval

Home buyers seeking to get a clearer picture of how much they can borrow can benefit from getting a home loan pre-approval.

Pre-approval is a lender’s written assessment of your creditworthiness for a loan. The assessment includes your ‘ability to repay’ a loan, based on your income; living expenses; and repayments for existing loans, plus an assessment of your ‘willingness to repay’ a loan, based on a number of factors such as your credit history, the stability of your employment and the number of times you change residential address.

Why pre-approval is helpful

Pre-approval brings peace of mind during the home hunting process, knowing that finance is on hand when you’ve found the home you’re ready to buy. Usually valid for 3 months, pre-approval can be renewed if finding a property is taking a while.

Not all pre-approvals are created equal

Pre-approval is not a guarantee of finance. Some pre-approvals – particularly those done in a few minutes, online, or by phone – won’t properly test your ‘ability to repay’ or your ‘willingness to repay’.

Talk to your local Mortgage Choice mortgage broker about arranging pre-approval for a loan that meets your budget and financial requirements.

Helpful link

Have you applied for a pre-approval before? Did it offer you some peace of mind during your house-hunting journey?

More ways than one to buy your first home

Posted on Tuesday April 5th, 2011 by Mortgage Choice
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Posted in Co ownership, First Home Buyers | No Comments »
Young couple unpacking

Young couple unpacking

First home buyers may be unaware that there are more ways than one to get into the property market.

Consider co-ownership
Sharing property ownership between two or more people, such as a friend, family member or de-facto partner, lets both parties pool their resources to pay a deposit, maximise borrowing power and share property buying and management costs. Legal guidance is essential when considering this approach.
Find your feet with a family equity loan
With a family equity loan, a parent or parents acts as the loan guarantor. The home buyer’s mortgage is secured against the equity in a family member’s property. The guarantor helps maximise your borrowing power, bridging the deposit and upfront expenses gap and helps you avoid having to pay lenders’ mortgage insurance.
Going in with Government assistance
There are numerous forms of Government assistance for first home buyers, such as the $7,000 First Home Owner Grant. The maximum value of the property you can buy with the help of the grant varies according to the property’s location. Your Mortgage Choice loan consultant will give you the most up to date information about assistance and concessions.
In New South Wales, to be eligible for the grant, your property must be valued at no more than $750,000. If your property is valued at up to $500,000, you don’t have to pay stamp duty. In July 2010, the NSW Government announced the Home Builder’s Bonus scheme. Under this scheme, if you’re a first home buyer you can save up to $29,490 if you’re buying off the plan in the pre-construction stage.
In Western Australia, the total value of the property must not exceed $750,000 if the home is located south of the 26th parallel (for instance in Kalbarri) or $1,000,000 if the home is located north of the 26th parallel (for example in Denham).
In Queensland, you may be eligible for the grant if you’re buying or building a home worth less than $750,000. In Victoria, the grant will only be payable where the price of the property or construction of the home does not exceed $750,000. Meanwhile in South Australia, there’s a property value cap of $575,000.
You can find out more about concessions, current schemes and exemptions from the Office of State Revenue in your state or territory or by talking to your mortgage broker.
Help is available for first home buyers

Help is available for first home buyers

First home buyers may be unaware that there are more ways than one to get into the property market.

Consider co-ownership

Sharing property ownership between two or more people, such as a friend, family member or de-facto partner, lets both parties pool their resources to pay a deposit, maximise borrowing power and share property buying and management costs. Legal guidance is essential when considering this approach.

Find your feet with the help from family

A parent or parents can act as the loan guarantor for a home buyer, by agreeing to let the home buyer’s mortgage be secured against the equity in their property. Having a guarantor can help increase your borrowing power, bridge the deposit and upfront expenses gap and help you avoid having to pay lenders’ mortgage insurance. Anyone who is considering being a guarantor for a property loan is advised to seek independent legal and financial advice before accepting the role of guarantor. Most lenders will insist on this, prior to accepting a guarantee. We have a detailed factsheet on guarantors if you wish to learn more about this approach.

Take advantage of Government assistance

There are numerous forms of Government assistance for first home buyers, such as the commonly known $7,000 First Home Owner Grant. The maximum value of the property you can buy with the help of the grant varies according to the property’s location. Depending on the state you’re in, there could also be other forms of government assistance for first home buyers such as tax concessions.

For example, in New South Wales, to be eligible for the First Home Owner Grant, your property must be valued at no more than $750,000. If your property is valued at up to $500,000, you don’t have to pay stamp duty. In July 2010, the NSW Government announced the Home Builder’s Bonus scheme. Under this scheme, if you’re a first home buyer you can save up to $29,490 if you’re buying off the plan in the pre-construction stage.

In Western Australia, the total value of the property must not exceed $750,000 if the home is located south of the 26th parallel (for instance in Kalbarri) or $1,000,000 if the home is located north of the 26th parallel (for example in Denham).

In Queensland, you may be eligible for the grant if you’re buying or building a home worth less than $750,000.

In Victoria, the grant will only be payable where the price of the property or construction of the home does not exceed $750,000. Meanwhile in South Australia, there’s a property value cap of $575,000.

You can find out more about concessions, current schemes and exemptions from the Office of State Revenue in your state or territory or by talking to your mortgage broker.

Please note: this information is general in nature and is a guide only. Your local Mortgage Choice broker can provide up to date information about grants, exemptions and stamp duty concessions in your state or territory. Your mortgage broker can also look after the First Home Owner Grant paperwork for you.

Useful Links

Are you looking to buy your first home? What do you think about the level of concessions available to first home buyers? How easy is it to understand the concessions available to you? What kind of information would you like to receive about the First Home Owner Grant?

How much can you borrow?

Posted on Monday February 21st, 2011 by Wayne Jones
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Posted in Home Loans | No Comments »
Wayne Jones

Wayne Jones

By Wayne Jones Mortgage Choice in Brisbane North, Queensland

Small change make big impact in home loan search

Making basic lifestyle changes can help people get their first home loan – and an amount that they can comfortably repay.

During the home loan hunt, the question on many first homebuyers’ lips is “how much can I borrow”. Some potential borrowers are quite surprised to discover that their credit card debts, other personal debts and savings strategies may affect their borrowing capacity.

When applying for a home loan, the lending institution almost always takes your credit card limit into account, even if your card is paid off in full each month. It’s generally not a question of how much you owe on credit cards – it can be the credit limits a borrower has. Generally, lenders don’t like to see too many credit cards, as it implies a lifestyle supported by credit.

How debt can affect borrowing capacity

Broadly speaking, every $1 of personal debt will reduce a person’s borrowing capacity by $5.
For example, someone with a $10,000 credit card limit and a $10,000 personal car loan may find their borrowing capacity is reduced by almost $100,000.

I usually recommend to people wanting to maximise their borrowing capacity to get rid of, or at least reduce, their credit limit on credit cards.

Deposit sizes and borrowing capacity

The size of your deposit is another factor that could limit your ability to borrow. While some lenders accept a 5% deposit, it’s becoming more common for lenders to require 10%.

If you haven’t saved enough for a deposit, asking a parent to become a guarantor for your home loan is another option to consider. I usually find that younger borrowers return from travelling; secure a well-paid job, only to find they still can’t get a loan. Many haven’t started a savings strategy.

How employment types may affect borrowing capacity

The nature of your employment can impact borrowing capacity, too. Permanent part-time employment tends to be viewed more favourably than casual work, despite casual work often paying a higher rate.

Self-employed people may be eligible for what’s known as a ‘low doc’ loan. These loans are suited to people who may find it difficult to provide common documentation (such as regular pay slips or tax returns) to validate their income and savings.

Top tips to help you prepare for a home loan

It’s a good idea to review your credit history. You can visit the Australian Securities and Investments Commission (ASIC) website for more information.

Get to work on building genuine savings. Having genuine savings is critical to getting a home loan. If you have plans to sell a car, or other items, so you can put the money towards your first home, I encourage people to do it sooner rather than later. Get your cash in the bank.
You need to show evidence of savings over a 3-month period.

Be consistent with your savings strategy

Put aside a regular amount each week or fortnight/month rather than making ad-hoc savings. A regular savings pattern certainly augurs well for that first loan.

 

If you need help with preparing for your first home loan, feel free to give Mortgage Choice a call on 13 MORTGAGE, or fill out a form on our website and we’ll contact you.

Are you hunting for your first property? What challenges have you faced when saving for your first home? Tell us about your experiences.

 

Useful links

Find out more about getting a home loan by reading our home loan fact sheets.
Keen to discover how much you can borrow? Try our home loan calculators.

WA council areas with the greatest increase in hold periods

Posted on Friday January 7th, 2011 by Mortgage Choice
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Posted in Home Loans, property report video | No Comments »

Are you looking at entering the property market in WA?

This week we look at council areas in Western Australia with highest increase in hold periods over the past 5 years, with a focus on Murray and Bassendean.

A hold perod represents the time between when a property is bought and sold, and can be an indicator of the appreciation rates and desirability of the area.

Plus coverage of:

  • An interview with Real Estate Institute Queensland about the strength of regional units and townhouse prices in the September quarter.
  • Tax tip on negative gearing and how it could reduce the tax payable and give a larger tax refund. 

 
Link to video

Useful Links:

Property investment tips
Find your local mortgage broker

Capital city suburbs with the longest ‘hold periods’ – Darwin

Posted on Wednesday October 27th, 2010 by Mortgage Choice
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Posted in property report video | No Comments »

Are properties in long ‘hold period’ suburbs a better investment?

A ‘hold period’ is a calculation which measures the time period between sales, expressed in years. Suburbs with long ‘hold periods’ are long established desirable areas with good infrastructure. This week we look at suburbs in Darwin with some of the longest ‘hold periods’. The Darwin suburbs examined this week include:

  • Nightcliff – Properties are held for an average of 6 years.
  • Nakara – this suburb has an average ‘hold period’ of 5.8 years before being sold.

Plus coverage of:

  • In an interview with CommSec economist, Savanth Sebastian speaks about the latest housing finance figures and the outlook for the property sector.
  • This weeks Tax Tip looks at co-ownership of rental properties and how this is treated when doing your tax.

Link to video.

If you like this video then you will also like Capital city suburbs with the longest ‘hold period’ – Hobart,  Capital city suburbs with the longest ‘hold period’ – Brisbane and Capital city suburbs with the longest ‘hold period’ – Adelaide .

Also, join our Home Loan Coach Twitter and Facebook platforms. There is heaps of great information going up on a regular basis!

Useful Links:

Special Home Loan offers

Find your local mortgage broker

Join Home Loan Coach on Twitter

Capital city suburbs with the longest ‘hold periods’ – Hobart

Posted on Wednesday October 20th, 2010 by Mortgage Choice
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Posted in property report video | No Comments »

Are properties in long ‘hold period’ suburbs a better investment?

A ‘hold period’ is a calculation which measures the time period between sales, expressed in years. Suburbs with long ‘hold periods’ are long established desirable areas with good infrastructure. This week we look at suburbs in Hobart with some of the longest ‘hold periods’. The Hobart suburbs examined this week include:

  • Glebe – This suburb has the longest ‘hold period’ of any suburb in Hobart, properties are held for an average of 9.8 years before being sold.
  • Mount Nelson – this suburb has an average ‘hold period’ of 8.7 years before being sold.

Plus coverage of:

  • In an interview First National CEO, Ray Ellis, talks about how the spring selling season is shaping up and his response on the RBA’s decision to leave rates on hold at 4.5%.
  • This weeks Tax Tip looks at negative gearing.


Link to video.

If you like this information then you will love what we have to offer on our Home Loan Coach Facebook , Twitter and YouTube platforms! Join us now for more property market related information.

Also check out Capital city suburbs with the longest ‘hold period’ – Brisbane and Capital city suburbs with the longest ‘hold period’ – Adelaide .

Useful Links:

Attend a Home Loan Coach Networking Night

Find your local mortgage broker

Join Home Loan Coach on Twitter

Investing in a property located near a university in WA

Posted on Monday August 16th, 2010 by Mortgage Choice
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Posted in First Home Buyers, Property Investment, Property Market, property report video, Top tips for property & home loans | No Comments »

Have you ever considered investing in a property located near a university?

This week we continue our property report video series where we look at the value in purchasing a house in a suburb located near a university.  The focus is on the university suburbs of Rockingham and Joondalup in Western Australia.

Plus coverage of:

  • An interview with Graham Wolfe from the Housing Industry Association about the federal governments funding for regional city infrastructure, what it will deliver and when.
  • And our regular tax tip segment which looks at making a standard end of the month owner or tenant rental statement acceptable to the ATO as an ABN tax invoice

Link to property video.

To see the previous parts of the series go to investing in a property located near a university in Hobart and investing in a property located near a university in Sydney or check out our Home Loan Coach YouTube channel.

If you have anything you would like to add about property investing or the housing market, please leave us your comments below.

Useful links:

Find a local mortgage broker
Book into a home buying seminar
Mortgage Secrets Video

Brisbane unit prices with median price of $350k-$450k

Posted on Friday June 11th, 2010 by Mortgage Choice
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Posted in First Home Buyers, Property Investment, Property Market, Top tips for property & home loans | No Comments »

On the look out for a unit in Brisbane for around $350k-$450k?

Having a look at the economy; construction has increased in the first quarter of this year which means growth.

According to the Australian Bureau of Statistics:

  • construction work grew 1.9% for the March quarter to $39.5m
  • residential construction grew 0.9%
  • construction work grew in all states except for the Northern Territory where it fell

The two suburbs in Brisbane which had over 50 unit listings for a median price of $350k-$450k were Summer Hill and Chermside. Great opportunities for potential first home buyers and investors.

In the full property report video Dan Molloy, REIQ MD, is interviewed on what else needs to be done to boost first home buyer numbers in Queensland.

This weeks tax tip is on how to turn your home into an investment property and what the Australian Tax Office requires in order to achieve this.

If you are in the market to get a home loan then have a look at our blog post: There’s more to a home loan then simply getting the lowest interest rate for advice.  Also, check out the Home Loan Coach YouTube channel for more property report videos.

If you would like to share your thoughts on the economy, first home buyers or Brisbane unit markets please do so below.