First Home Buyer FAQs
How much money can I borrow?
The amount of money you can borrow differs from lender to lender depending on your own circumstance and that's one of the many advantages of using a broker. Our state-of-the-art software will show us based on your own individial finances who will potentially lend you the most amount of money.
How do I choose which home loan is best for me?
Once again, our software will find the lenders from our panel that will best suit your needs. We can then discuss which lender you would like to use based on your needs and their competitive rates.
How much deposit will I need?
The deposit that you require will depend on the lender that we choose. As a general rule, you will require a minimum of 5-10% of the purchase price. For most lenders, if you pay less than a 20% deposit, you will be required to pay Lenders Mortgage Insurance (LMI). This is explained in the next FAQ.
Am I eligible for the first home owners grant in NSW?
You may be eligible for a one off payment in NSW of up to $35,000. To be eligible, a first home buyer needs to purchase or build a brand new home for less than $750,000.
If you are a first home buyer and are eligible, you may receive a one of payment of $15,000. However, this will decrease to $10,000 on the 1st of January 2016. You may also be eligible for an exemption or concession of stamp duty of up to $20,000. See the video below for more details.
In most cases, the lenders are able to act as agents for processing the grant and may allow the funds to be either available at the first progress payment when building, or at settlement for purchasing an already built new home.
Lenders Mortgage Insurance
As a general rule, if you are borrowing more than 80% of the property value, you will need to pay Lenders Mortgage Insurance (LMI). This insurance actually covers the lender, not the borrower, in the event that if the loan cannot be repaid back and the sale of the property did not quite cover the loan. While LMI would appear to have no benefit to the borrower, it reduces the lenders risk, meaning you can borrow more funds as a percentage of the property.
A home loan with LMI can take longer than one without, as the lenders mortgage insurer also needs to approve the loan, and they may also have stricter guidelines. It may be possible to waive the LMI fee if you have a suitable guarantor for part of the loan. Click here to download more information on LMI.
For more information on buying your first home, please download our Free Home Buyers Guide Below