Do Your Sums
First Home Buyers Guide from Austral Mortgage
Step 2: Do Your Sums
Our home loan calculators will give you an indication of the maximum loan you can secure in your particular circumstances.
For further clarification, always feel free to ring or email one of our experienced mortgage consultants
What costs are involved when you buy your first home?
The biggest initial outlay is the deposit, which is usually 10% of the purchase price and is payable when you exchange contracts with the seller. If you are relying on government grants for part of the deposit, the Austral team can help to arrange a Deposit Bond after unconditional loan approval.
You should also allow additional funds (approximately 5% of the purchase price) for stamp duty, legal fees, insurance and other costs associated with buying a property and arranging a home loan.
Some States provide exemptions and concessions to first homebuyers.
For further information on what you might be entitled to in the way of concessions and exemptions, you can check out your State Revenue Office website (details at the bottom of this page).
What is the maximum amount I can borrow without Lenders Mortgage Insurance?
Lenders Mortgage Insurance or LMI is not required if you are borrowing less than 80% of the purchase price or value of the property (whichever is the lesser). If your intention is to borrow more than 80% of the purchase price / value, the funder will require mortgage insurance. The insurance protects the lender from any potential losses should you default on your loan.
The mortgage insurance premium will vary, depending on the loan amount, loan to value ratio (LVR), the State in which you are purchasing the property and whether genuine savings have been demonstrated.
Austral can lend up to 95% of the property purchase price / value. The maximum lend also depends on the geographical location and the type of property, and your personal circumstances. In some cases, the mortgage insurance premium can be added onto the approved loan amount.
What are genuine savings?
When borrowing over 80% of the purchase price / value, the mortgage insurance premium will be lower if you demonstrate at least 5% genuine savings over a 6 month period.
To meet the criteria for genuine savings, your bank account must either show an increasing balance or regular contributions towards the opening balance. Large lump sum payments are not acceptable unless you’ve held onto them for at least 6 months.
Are Gifts from Family acceptable as part of the purchase price?
In addition to your 5% genuine savings a gift from your parents or grandparents to assist you with the purchase of your first home will be taken into account as part of your contribution to the purchase.
Can you help with my First Home Owner Grant?
Yes. The Austral Team can lodge the FHOG application on your behalf and if approved by the State Revenue Office, we’ll have the funds available at the settlement of your home loan.
Once you have arrived at a ball-park figure for your potential purchase price, you will need to take into account some other charges, as mentioned above, that may apply.
The Next Step…
Useful First Home Buyer links
State Revenue Offices: