Navigating your first home purchase with SBB Lending

1.    Save that deposit

Most lending institutions recommend a minimum 20 per cent deposit, with additional costs (see point 7) over and above your deposit. So, if you’re looking to buy a $500,000 home, you’ll need $100,000 deposit plus enough to cover these fees and charges.

While 20 per cent is the goal, the good news is that it’s possible to secure a loan with less. Even 5 per cent could be enough to secure your dream home, in the right circumstances.

There are many grants available to help first home buyers increase their deposit amount and having your parent/s commit to being guarantor is also a helpful option, using the family home as equity.

So, if you don’t yet have the 20 per cent saved, reach out to your broker anyway.

2.    Engage the right lender

Finding the right lender, whether that’s a bank or a mortgage broker, as early as possible in the process can alleviate a lot of the stress usually associated with buying your first home. A mortgage broker like SBB Lending can represent your best interests with a large number of lending institutions and can guide you through the process from start to finish, and beyond.  

3.    Research where you want to live

So, you know where you want to live, but have you really researched the market? What options are available? Do you want a new build or an established home? What are the average prices? Can you afford your dream suburb? What has the market been doing in the area? Do your research!

4.    Look into first home buyer grants

There is a plethora of first home buyers’ grants available, especially during Covid (with the government trying to stimulate the economy). If this is the first home for you and your significant other, it’s likely you will qualify for a grant or maybe two. Your mortgage broker can help you navigate the grants available. www.treasury.qld.gov.au/programs-and-policies/queensland-first-home-owner-grant/

5.    Learn the lingo

There’s a lot of jargon you’ll need to learn when buying your first home, including: appraisal, borrowing capacity, auction, contract, conveyancing, settlement, equity, fixed rate, variable rate, mortgage insurance, pre-approval, stamp duty, vendor … and more!

6.    Understand your borrowing potential

Best to understand your borrowing potential as early as possible in the process, so to avoid disappointment down the track. You can use the calculators on the SBB Lending website (www.sbblending.com.au/resources) or speak with your mortgage broker.

7.    Get your head around the additional costs 

As explained above, the deposit isn’t the only “cost” you’ll be up for when purchasing your first home. You will need additional finances to cover:

-       Stamp duty – a state level imposed on all property transactions

-       Property transfer fee

-       Mortgage registration fee

-       Lenders mortgage insurance (if you’re borrowing more than 80 per cent of the value)

-       Loan application fee

-       Pest and building inspection costs

-       Conveyancing fees

-       Lender’s property valuation fees

8.    Get pre-approved

Getting pre-approved for a home loan (up to a set amount) not only helps you to work out how much you can borrow and will give you a clear budget limit, but it will also give you power at negotiation time. This is especially useful at auction. 

9.    Buy! Buy! Buy!

By following these tips, you now have the knowledge, support and positioning you need to make an offer, with your mortgage broker by your side. He or she will guide you through the rest of the process, from making that offer to signing all the relevant paperwork, liaising with the bank, and settling on your first property.

Happy house hunting!

SBB Lending are your Ipswich and Brisbane Mortgage Brokers of choice. With access to over 30 lenders, our team take the time to match you with the right home loan. Looking for a home loan? Connect with Matt Gnech and Katrina Webb today.