Tips for First Home Buyers
Savings - the big hurdle!
Most banks these days require you to contribute a significant amount towards your purchase. On top of that, your contribution usually needs to be "genuine savings". The main way banks test to see if your savings are "genuine" is to confirm that the money has been in your account for 3 months or more. The amount required ranges from 2% to 5% - speak with a broker about what would apply for your specific scenario. An Extreme broker can also recommend various deposit accounts to make sure you are getting an excellent rate of interest while you save for your home deposit.
Consider buying a home for someone else!
You can use the rental income from the property to fully or partially pay off your mortgage at the same time as enjoying generous tax deductions along the way. There may be capital gains tax issues but they can be minimised or even negated with the right advice. You can potentially borrow more this way than if you lived in the house yourself. Find out your borrowing capacity by having a chat with a reputable broker.
Family help at hand?
If you have a mum or dad who owns property they may be able to help you get into your own home sooner. Guarantor loans are getting more and more popular because they dramatically reduce the costs associated with buying a property (namely mortgage insurance). Mum and Dad need to be comfortable with the whole thing, though, so make an appointment to see a broker about all the ins and outs of guarantors.
Consider building your first home.
Building can be a way to enter the market at a lower price than buying an established home. During construction you can keep repayments under control in some cases by only paying $50/week towards the loan until it's completed so it's affordable even if you're renting at the same time.
Government Grants - Did you know...
- You may still be eligible for the grant even if you owned a property before BUT the property was an investment.
- You may be eligible for the REBA $2,000 fee rebate as a First Home Buyer - download application form
- Download the WA FHOG by clicking here
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