First Home Buyers, What You Need to Know

Buying your first property can be daunting. What is mortgage insurance? What’s the difference between variable and fixed? What is the better for me, principal and interest or interest only? Here’s what you need to know.

Deposit
You will need between 5-20% of your property’s value as a deposit. The bigger your deposit, the smaller your repayments & cost of LMI (Lenders Mortgage Insurance). The other option is for a guarantor loan, which enables you to borrow up to 100% of the property value.

Lenders’ Mortgage Insurance (LMI)
Don’t have 20% deposit? You can still get a loan but you will be required to take out LMI. This insurance protects the bank in case you default on the loan. There is two options to pay LMI, pay it upfront, or capitalize it into your mortgage.

Loan Application Fee
As the home loan market is extremely competitive, most banks are waiving the application fee, depending upon which bank your loan is written through, this may vary. Your MADD mortgage broker will discuss this further.

Legal / Conveyancing
You need a solicitor/conveyancer when you buy a property to complete the transaction, they will do important searches on your new property & even attend settlement to hand over new transfers. At MADD we can recommend a conveyancer who can handle your new property purchase.

Government Fees
The price of your property will determine how much you pay for Stamp Duty, Land Transfer Fees etc. Your MADD mortgage broker will show you all relevant government fees.

Home & Contents Insurance
It’s important to take out home & contents insurance on your new property, most banks & lenders actually require it before settlement. Your MADD mortgage broker can arrange a quote through our panel of insurers.

Inspection Fees
Getting a building & pest inspection is recommended, you’ll want to make sure the property you’re buying is council approved, structurally sound & not full of nasty termites. We don’t recommend any building & pest inspectors, we believe you should search for a local, just make sure they are fully licensed and insured.

Utility Connections
With all the hype of buying your new property, don’t forget to get utilities connected or transferred, otherwise it will be an interesting first couple of nights in your home.

Council Rates
Your conveyancer should do a search on this and see what your council rates are and if any amendments are needed.

Stamp Duty
Each state has stamp duties payable on property purchases. Refer to links below for more information about your state.

Is there any government grants being a first-time buyer?
Each state has a different FHOG First Home Owner Grant. We have a JP (Justice of the Peace) who can help you apply for the relevant grant.

Have a look below what stamp duty concessions you may qualify for;

QLD www.osr.qld.gov.au
NSW  www.osr.nsw.gov.au
WA www.dtf.wa.gov.au
SA www.revenuesa.sa.gov.au
VIC www.sro.vic.gov.au
ACT www.act.gov.au

At Madd Loans, we can answer any questions you have about buying your first home. Contact us today.