Name: Mortgage Broker Brisbane - Hunter Galloway
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In this first home buyer guide, we will help you learn how to buy your first home in record time.

The best part?

Everything here applies to first home buyers in 2024.

In other words: you don’t need to worry about reading out-of-date stuff. So without further ado, let’s get started.

CHAPTER 1: Establish A Clear Goal

It is important to have specific goals and set timeframes for home ownership. To begin your journey towards buying your first home, it’s critical to set a clear goal and establish a realistic time frame. That’s what we will cover in this chapter.of the first home buyer guide

Buying a house is undeniably a challenge and time-consuming. In fact, for many, saving up for a deposit can take well over a year. Despite the hurdles, home ownership offers immense rewards, such as building equity and increasing wealth which provides stability and comfort.

Determine your readiness - a first home buyer guide to making a decision.

Becoming a homeowner is a major life decision that can bring a great sense of accomplishment and pride. But you need to be ready…

The first step is to evaluate whether you’re genuinely prepared to take on the responsibilities and commitment of being a homeowner. Here are some additional points to consider as you evaluate whether you are ready to take on the responsibility of being a homeowner:

Owning a home involves ongoing maintenance and repairs. This can be costly and time-consuming. Are you prepared to handle unexpected costs and set aside the necessary time and effort to keep up with repairs? If not, don’t worry, that is what this first home buyer guide is here to help you do…
Buying a home is a huge financial investment as it requires a downpayment, mortgage repayments, property taxes, insurance and other costs, which we will cover in detail in Chapter 2. Do you have a solid financial plan to manage those expenses?
Buying a home is different from renting as it requires a certain level of commitment. You can’t just pick up and leave as you can do with renting. Are you ready to settle down in one location for the long term?
Lastly, are you emotionally ready for the responsibilities of homeownership? Are you ready to take on the challenges and rewards of owning a home? Do you have a strong support system to help you throughout the journey?

The Next Step

Your next step is to write down your homeownership goal. Writing down your goal can be a constant reminder and motivation throughout the home-buying process. On a piece of paper or a dedicated journal, clearly State your goal of buying a home and set a deadline for achieving this goal. Choose a realistic deadline based on your current situation. Keep in mind that the home buying process can take longer than expected, so it’s essential you remain flexible and adaptable.

Update your journal regularly with the progress you are making so you can stay motivated through the ups and downs.

Now that you have determined that you are ready to buy a home, it’s time to move into deeper details about the money side, and that is what we will cover in the next chapter of our first home buyer guide.

CHAPTER 2: Know Your Budget

To start with, we’re going to think about one of the most important questions for first home buyers to consider:

“How much can I afford to pay for my first home?”

Things like bank and mortgage broker websites will give you a simple estimate based on things like your income and your savings, but are they really accurate?

In this chapter, you’ll find out.

Let’s Start With A Quick Story

Back in 2009-2010, I (over-optimistically) thought of myself as an up-and-coming property mogul.

I bought my 2nd property by stretching my budget and settling for a barely manageable interest rate of 6%. It was a small flat that I planned on renovating and flipping for a massive profit…

However, within 6 months, interest rates started increasing, and I found myself faced with a rate of 7.5%. An increase of 1.5% might not seem much, but it meant that I was paying an extra $875 per month! I couldn’t afford this.

I managed to hold on for a little while, but I ended up having to sell quickly because I couldn’t make the repayments, and almost lost the place.

This should show the importance of understanding how much you can comfortably borrow without putting your finances at risk. It is also one of the reasons why you should really study this first home buyer guide.

Understand Your Borrowing Power

The first thing you need to understand is the concept of borrowing power. Your borrowing power refers to the maximum amount you might be able to borrow based on your income and your deposit.

We will look at borrowing power in more detail later, but for now, you can think of it as something like the credit limit on your credit card. Just because you can borrow a certain amount doesn’t mean you have to!

First Home Buyer Guide To Understand LVR, LMI & Genuine Savings

Borrowing power is important, but you must also understand terms like LVR, LMI and genuine savings. Banks will use these terms, and you will become confused if you don’t know what they are.

Loan-To-Value Ratio

LVR stands for loan-to-value ratio. It is the percentage of a home’s value that you have to borrow. Generally, the lower your LVR is, the easier it will be for you to get a loan. If your LVR is higher than 80%, you need to consider LMI.

Lenders Mortgage Insurance

LMI stands for Lenders Mortgage Insurance, and it is designed to cover the bank if you have to default on your loan. Lenders Mortgage Insurance allows people like first home buyers to purchase a home with a less than 20% deposit. The amount of LMI you will pay depends on the size of your deposit, so it’s in your best interest to save the biggest deposit possible.

Different lenders can charge different LMI fees, so it’s worth shopping around. Sometimes, you can even have LMI waived if you work in a certain profession with a reliable income. Use our LMI calculator to learn more about LMI and how much you might have to pay.

One of the most important things you should remember in this first home buyer guide is: LMI protects the bank—not you.

Genuine Savings

Genuine savings are something that banks consider when assessing loan applications. They include:

Savings held or accumulated over 3 months.
Shares or managed funds held for 3 months or more.
Equity in real estate.
Funds held in First Home Super Saver Scheme.

Different lenders require different amounts of genuine savings in different situations. But generally, if you have a less than 10-15% deposit, banks like to see 5% of a property’s purchase price in genuine savings. In some cases, you will be able to use your rental history to meet the genuine savings requirements. To do this, you need to have the following:

A current rental.
At least 6 months of clean rental history.
Be renting via a licensed property manager.

If you fit these criteria, your rent for the last 6 months can be used to show genuine savings, meaning that you can use a deposit sourced from “non-genuine” savings.

Note that you still have to provide a deposit if you are renting. You just might not have to prove genuine savings.

Now that we’ve got that out of the way let’s go back to borrowing power:

A First Home Buyer Guide To Maximising Your Borrowing Power

If you think like a bank, you will realise that the only thing that they care about when lending money to first home buyers is the answer to the question:

“Can you pay now, can you pay later, and do you have proof?”

How do you prove that? This first home buyer guide will show you how…

The 5 C’s Of Credit

Although different lenders have different requirements, they all use similar fundamental criteria when assessing loan applications.

Something called the 5 C’s of Credit is at the core of these assessments. It includes:

Character, which refers to your reputation, credit rating and financial history.
Capacity, which considers your ability to repay a loan based on your income.
Capital, which refers to the size of your initial deposit. Remember, bigger is better.
Collateral, which are the assets used to secure a loan. In the case of a home loan, this refers to the property.
Conditions, which refer to things like interest rates, loan amount and loan term.

These fundamental criteria have a huge impact on your borrowing power.

Improving Your Borrowing Power

As a first home buyer, you should work on being able to borrow roughly 5 to 6 times your gross annual salary.

Sometimes you may find that you get better borrowing power by simply switching to a different lender. But there are also a few other things that you can do to increase the amount. They include:

Improving your credit rating. Make sure your credit report is accurate and up to date, pay your bills on time, reduce your debt and don’t apply for too much credit.
Removing any outstanding defaults. If you have defaults, pay them off and contact the creditor or collection agency to remove the default from your file.
Getting rid of your credit cards. If you have a credit card with a $20,000 limit that you never use, the bank will still factor that in and reduce your borrowing power. So get rid of any unused credit cards.
Paying off personal loans. Personal loans have high interest rates and can reduce your borrowing capacity significantly. Pay off any personal loans.

Trying to increase your income (It never hurts to ask for a pay rise!). The higher your income, the more your borrowing capacity.

Think About How Banks Assess Income

Typically, first home buyers take out loans over 25-30 years. Banks want to be confident that you will be able to continue making repayments for that period. They will assess the stability of your income over the past year or two to help them make their decisions, which means that you will have to be able to show proof of your income.

Some forms of employment are preferred over others. Permanent full or part-time employment is seen most favourably by lenders. If you are employed casually, you will find it harder to get a loan, but it’s still possible.

Finally, contract or self-employment require significant time on the job before lenders even consider an application. Note that if you’re self-employed, banks will be more conservative and will require more documentation before approving a loan.

How Big Does My Deposit Need To Be?

As a first home buyer, you need to be aiming for the biggest deposit possible. Lenders generally prefer deposits of at least 20%. However, if you have a good credit rating and a steady income, you should be able to get away with 5-8%

Is It Possible To Buy Without A Deposit? - A First Home Buyer Guide To No Deposit Home Loans

Don’t stress if you don’t have a deposit saved up. You might still be able to buy the home of your dreams through one of the following ways::

Guarantor loans. If your parents can act as guarantors, you may be able to borrow up to 105% of the purchase price, eliminating the need for savings. Their property will act as the security for your loan. This option applies if you’re buying your first home and are entitled to the First Home Owners’ Grant.
Gifted funds. If your parents or any other person in your life are willing to gift you funds to put towards your deposit, you will have to pay a lot less out of your own pocket.
First Home Owners’ Grant. As a first home buyer, you may be eligible for Queensland’s $15000 First Home Owners’ Grant. You can put this towards a deposit, and it would equate to a 5% deposit on a $300,000 property!

It’s important to realise that getting a no-deposit home loan is a lot harder, but it’s definitely an option worth considering.

Make Sure You Stay Realistic About Your Budget

As we mentioned earlier, just because you have a certain amount of borrowing power doesn’t mean you have to use it all. Understanding the difference between how much you should borrow and how much you can borrow is crucial. Most first home buyer guides do not mention this important fact.

You need to consider the other costs associated with buying a house, including things like rates, maintenance and repairs, and the risk of rising interest rates. Borrowing too much can leave you in a difficult financial situation.

While it may be tempting to stretch your budget to buy your dream home, it is important to consider the long-term financial implications of doing so. As a first home buyer, there’s no sense in sacrificing your mental and financial health for the “perfect house”. Set a budget and stick to it, even if it means getting a smaller place. Remember, your first home is hardly ever your forever home. You can always upgrade later.

Work Out The True Cost Of Buying Your First Home

By now, you should understand that overextending yourself is a terrible idea. There are numerous additional costs that you need to consider when buying your first home. These include the following:

Borrowing Costs

There are a range of borrowing fees associated with buying a home, and these include::

An application fee of up to $1000.
Document preparation fees.
Bank valuation fees.
Annual fees of up to $400 per year!

These fees can be waived in some situations, so it’s worth working with an expert mortgage broker like Hunter Galloway.

Government Fees

There are quite a few hidden government fees that you need to be aware of and budget for. You will have to pay a registration of mortgage fee (typically $187 in Queensland) and a registration of transfer fee, which can range between a few hundred dollars to a few thousand.

Stamp Duty

If you don’t already know, stamp duty is a non-optional state government tax that applies to any property purchase. It can range from thousands to tens of thousands of dollars. Stamp duty is usually the highest cost of buying a home. However, first home buyers can get stamp duty waived in Queensland under certain conditions.

Council & Water Rates

Every year you will have to pay council rates. Councils need to charge rates to raise revenue so they can provide services and infrastructure to their communities.

Each year, as part of the budget process, councils decide the rates and charges for the financial year. The level of rates that landowners must pay is at the sole discretion of their council. You may need to pay the person you’re buying the property from the remaining yearly/quarterly rates – e.g. if you are settling in June, but the previous owner has paid until July, you need to pay them for that one month – and this is payable on settlement!

Again this is another cost that isn’t negotiable but worth being aware of to budget into the costs of owning your home.

To give you a bit of an idea, here are a few suburb examples:

Suburb	2021-2022 Average Rates	2022-23 Average Rates
Brisbane City	$1,378.23	$1,438.32
East Brisbane	$1,957.60	$2,040,01
South Brisbane	$1,403.71	$1,466.31
Kelvin Grove	$1,726.82	$1,793.99
Ashgrove	$2,181.09	$2,278.14
Fortitude Valley	$1,309.07	$1,375.30

Estimate: $1,000 to $2,300 for council rates per year, depending on the suburb.

Strata Fees

If you are planning on buying a stand-alone house, then you don’t need to budget for strata fees. However, if you’re buying a unit, apartment or townhouse that’s part of a complex, you will need to pay fees that cover the maintenance of the building complex, including things like cleaning, gardening and repairs.

Make sure that you get a strata report detailing these fees before you move in, otherwise, the body corporate could force you to pay significant fees that you weren’t expecting.

Home & Contents Insurance

Insurance is an essential non-negotiable that people often overlook. We will look into it in more detail later; right now, you just need to be aware of it.

Legal Costs

You may need to pay a legal professional like a lawyer or conveyancer for things like title searches, strata reports and arranging settlement details. The average a first home buyer should budget for legal costs is approximately $1000 to $2000.

Building & Pest Reports

Building and pest reports generally cost $500 to $800 and could save you a world of pain in the future. We’ll look at this in a later chapter. Just bear in mind that building and pest reports are very important, and you should not try to save money by skipping on them.

Moving & Connection Costs

Also, consider costs like removalist fees (anything up to a few thousand dollars) and utility connection costs. Even the relatively small costs of telephone, internet, electricity and gas connections can add up.

With all the costs we mentioned above, you should budget about 3% of the purchase price to cover these costs.

CHAPTER 3: Buy At The Right Time

At this point in our first home buyer guide, you should have a fair idea of how much you can borrow without putting yourself under too much financial strain, so let’s look at the next big question: When should you buy?

Let’s get started.

A First Home Buyer Guide To The Question - When Is The Right Time To Buy?

The property market is fraught with uncertainty, and it’s important to realise that no one’s opinion is 100% right. No one can fully predict market cycles. Two problems usually face first home buyers when buying a home:

Fear of missing out (FOMO), which refers to the idea that people often act because they don’t want to miss out on a potentially good opportunity. It’s important not to succumb to FOMO and buy a property that’s not right. Remember, as we said earlier, you can’t just up and leave if you discover you bought the wrong property!
Fear of joining in (FOJI), which you may not know and occurs when you don’t do something you should because you’re too careful. In this instance, you may miss a golden opportunity.

When it comes to buying your first home, you need to find the balance between FOMO and FOJI so that you aren’t heavily impacted by either. This is why it is important to have a first home buyer guide helping you along the way.

Here, we will teach you how to look at your situation objectively so that you make more informed, less emotional decisions.

Assess Your Situation

It’s important to approach your situation objectively and without emotion, taking into account your unique circumstances.

Some of the things you’re going to want to consider include the following:

Your Employment Situation

This is a crucial part of any loan application. Ensure that you’ve been in your job for at least 6 months (more is better) and that you won’t need to change jobs until your loan has settled. If you work casually or part-time, ensure that your income is relatively steady. In addition, if you are self employed or a contract worker, you should ensure your records are up to date.

Your Spending Habits

Almost all banks will want to look at your last 3 or 4 months of day-to-day bank transactions. They will look at your spending habits and assess how much it costs for you to live each year.

Control your spending habits for a few months before applying for your loan. You might need to take a break from those expensive lunches and designer clothes for a while.

Tell your mortgage broker about any one-off expenses like holidays or plane tickets, which can impact your ability to prove that you have the capacity to repay your loan.

Your Credit Score

As we’ve already touched on in this first homebuyer guide, a bad credit score will make it much harder to get a loan. If you do get a loan, you will end up paying higher interest.

Check your credit score using Equifax. Aim for a minimum of a good score (622-725), but try and get an excellent score (833-1200) if possible.

Check any defaults on your credit file and make sure that the information presented is accurate. Likewise, double-check your personal info and loan history. Incorrect information can negatively impact your credit rating.

Your Deposit

You need to make sure that you’re doing everything in your power to maximise your deposit; otherwise, you will end up paying a significant LMI.

Aim for at least an 8-10% deposit. If you’re using a guarantor to minimise the deposit you need, make sure you’re aware of and have budgeted for the costs we covered above.

If your deposit is slightly short, consider asking your parents or another person you’re close to for a gift. This can significantly reduce the amount of LMI you have to pay!

Time In The Market vs Timing The Market

As a first-home buyer, it’s important to take a step back and avoid market cycles influencing you. Both FOMO and FOJI can become problematic if you start trying to buy when the market is at a low.

Don’t let short-term market fluctuations influence lifestyle decisions like buying your first home.

If you’re in the research stage and in no hurry to buy your first home, you could consider doing some research into the current market situation.

However, if you are planning on purchasing your new home within a year and intend to live there for a significant amount of time, then you should not worry too much about short-term market cycles.

So it’s not about timing the market, but it’s about whether or not it’s your time to get into the market.

Renting Is An Option - First Home Buyer Guide To Rentvesting

This probably isn’t something you expected to read in a first-home buyers’ guide to buying a property, but it’s the truth – renting is an option…

More and more homebuyers are using a strategy called rentvesting which allows you to invest in property (or other assets) while continuing to live in an attractive neighbourhood.

In cities like Brisbane or Sydney, mortgage repayments and other costs on your property can equal roughly double what you would pay in rent for a comparable property. Therefore, you would be better off renting and putting the extra towards investing in a cheaper property in a different place.

The rest of this first home buyer guide will focus on first home buyers who want to live in their new house, but you can find out more about rentvesting here.

Remember, You Don’t Have To Live In Your First Home Forever

Buying your first home can be an emotional ride that may lead you to lose sight of the bigger picture and believe you’re searching for your forever home.

Rather than buying for the future, buy a home that you can afford, and that is right for your situation now. This will limit your financial stress and allow you to work towards upgrading in the future. Remember, once your current home has built enough equity, you can use it as a deposit to purchase a second and better home!

Australians are becoming more mobile than ever, and there’s no reason why you can’t move if your financial situation changes in the future.

Let’s Recap The First Home Buyer Guide So Far

At this stage in the first home buyer guide, you should understand your budget and financial limitations. You need to have enough confidence to start your journey of buying your first home.. As you’ve seen, preparing for a loan application can take months, so it’s important to start thinking about things early.

In the next section, we’re going to cover loans and pre-approval for loans in a bit more detail.

CHAPTER 4: Get The Right Home Loan

In this chapter, we will explore everything to do with home loans, including:

What types of loans there are.
What different features you can get with your loan.
What your monthly or fortnightly payments really mean.

Although most go through a mortgage broker when they’re getting their first home loan, you should still understand everything in this chapter so you know what the mortgage broker is talking about. Knowing this information will also enable you to ask relevant questions that will allow you to make informed decisions. Once you understand everything in this first home buyer guide, you can choose to accept or reject some of the mortgage broker’s recommendations based on what’s best for your situation.

Do I Have To Use A Mortgage Broker?

The simple answer is no; of course, you don’t. If you’re confident and know exactly what you’re looking for and how to get it, you can go straight to the bank.

However, mortgage brokers can help you get the best deal, maximise your borrowing power and improve the chances of the bank approving your loan.

Here are a few advantages of using a mortgage broker:

Mortgage brokers usually have access to a wide range of lenders and loan products. This means they can get you a home loan that suits you perfectly – even if you have special circumstances.
Getting your home loan application ready is tedious and involves A LOT of paperwork. A mortgage broker can save you time and effort by handling some of the paperwork for you.
Some mortgage brokers with vast industry knowledge can negotiate loan terms and interest on your behalf, ensuring you get a better deal.
At Hunter Galloway, we walk with you through the entire process from the time you decide to buy a home. All you have to do is get in touch with us the moment you decide you want to buy a house, and we will help with saving for a deposit, budgeting, property research etc. until you get the keys to your home! We even do a follow-up on our clients a year later to see how they are doing!

The most important thing a mortgage broker can help you with is getting a proper pre-approval.

Pre-approval

Many first home buyers jump straight into the property searching process without even thinking about finance. Ultimately, this can result in stress and disappointment, especially if you miss out on your dream home because you couldn’t secure finance in time.

The solution to this is getting a pre approval for a loan. A pre-approval lets you know exactly how much a bank is willing to lend you so you can look for properties within that range.

Getting pre approval involves speaking to a mortgage broker before you even start looking for a house.

Now that we’ve got you thinking about using a mortgage broker let’s delve deeper into home loans for first home buyers.

A First Home Buyer Guide To Choosing The Right Home Loan

It’s easy to become overwhelmed when you’re looking for your first home loan. There are dozens of different types of loans out there, and each situation requires a different type of loan. It’s important to make sure that you choose the right home loan so that you put yourself in the best financial position possible.

Understand Variable vs Fixed Home Loans

When looking at home loans, the first thing to consider is whether you want a fixed or variable rate.

Fixed rate loans will give you a fixed interest rate for a period of up to 5 years, while variable loans will have an interest rate that will change according to the current interest rates.

Variable and fixed rate loans have pros and cons; ultimately, the choice is yours. However, it’s an important choice that requires research and careful consideration.

Split Home Loans

If you are unsure whether to fix your interest rates, there is a third alternative that attempts to find a balance between the two – split home loans. You can split your loan in whatever proportion you would like, according to your situation, but a 50/50 split is the most common.

Repayment Types

Now that we’ve covered the types of loans, we need to look at repayment types. There are two main types of repayments:

Principal and interest (P & I), which involves paying off both the interest and a portion of your principal loan. This type of loan will allow you to reduce your debt quickly. People like first home buyers who want to live in their property are best suited to P & I loans.
Interest Only (IO), which involves only paying the interest on your loan while keeping the amount that you owe constant. Property investors who want to minimise repayments usually use interest only loans.

Make Sure You Check Comparison Rates

Comparison rates are basically interest rates that include both interest on the loan and any fees and charges related to the loan. They are useful for comparing different lending institutions to determine which is best for you.

Some lenders offer low interest rates but have comparatively high fees and charges. This means that you can’t always take interest rates at face value. The comparison rate is about figuring out the true cost of the loan. It compares loan fees and charges, terms and repayment frequency.

Think About Extra Features

There are various features that you can add to your home to help you pay it off quickly. These include things like:

the ability to make extra repayments,
redraw facilities
home loan offset accounts.

However, these generally cost extra, so you need to think carefully about whether or not they’re useful.

Be Aware Of Hidden Fees

Banks charge a wide range of fees for home buyers, which can quickly add up if you’re unaware of them. Talk to your mortgage broker and ask them to list any fees that you’re likely to have to pay. You can also read a first home buyer guide and use the following techniques to minimise fees and costs:

Consolidate your accounts into one bank so you’re not paying multiple bank and transaction fees.
Avoid going into the branch. Instead, use internet banking (which is usually free) wherever possible.
Use automatic payment services.
Avoid phone banking, which usually has fees associated with it.
Use your debit card rather than a credit card.
Watch out for special service fees.

Home loan fees can add up quickly, so make sure you’re thinking about them.

See If Your LMI Can Be Waived

If you have paid a deposit that’s less than 20% of the home loan amount, you may be liable for lenders mortgage insurance (LMI). However, you may be able to get your LMI waived if you work in a certain field. For example, doctors only need a 5% deposit to get their LMI waived.

You may also be able to reduce the amount of LMI you have to pay by selecting your lender carefully or by using a guarantor.

Why Is Pre-Approval Important?

A pre-approval is an indication from a lender that they will approve a loan of a certain amount, assuming your income and circumstances don’t change. Getting pre-approval helps you confidently make offers on properties because it gives you access to finance much faster.

Without pre-approval, it’s hard to know how much you will be able to borrow. With one, you will have confidence in making offers and bidding on properties at auctions

In the following sections of this first home buyer guide, we will tell you everything you need to know about pre-approvals

What Do I Need To Get A Pre-Approval?

Getting a pre-approval for a home loan involves an assessment of your financial assessment and eligibility for a loan. As a first home buyer, you must be prepared to provide things like ID documents, payslips, bank statements and details of any other major assets you have.

It’s important to realise that not all pre-approvals are created equal. Some have a much higher chance of actually resulting in a loan than others. You may have to meet some pre approval conditions such as bank valuations and verification of all provided details..

How Do I Know If I’ve Got A Real Pre-Approval?

Asking potential lenders a few questions can give you an idea of the reliability of your pre-approval. Some banks provide unreliable pre-approval, which means that you can run the risk of having your loan declined after pre approval. To ensure you have a proper pre approval, ask the following questions::

Has my application gone to the credit department?
Have LMI approved my application?
What are the conditions of my approval?
Can I bid at an auction based on this approval?

Common Pre-Approval Mistakes

Getting the right pre approval is important. This means avoiding some of these common pre approval mistakes:

Thinking a pre approval is the same as a formal unconditional approval. Securing a loan after receiving pre-approval depends on a few factors, including updated income information, property valuation to confirm its suitability and a current credit report.
Assuming you can purchase any type of property. Some banks restrict lending for units, while others restrict you based on bushfires or flooding restrictions. So make sure the property you want to purchase is acceptable to the bank before getting the pre-approval.
Thinking a pre approval lasts indefinitely. Most pre-approvals are only valid for 3-6 months, so ensure you’re aware of this.

In conclusion, pre approvals are definitely still useful, as they can help you reduce the amount of time it takes to get finance, making your offers a lot more competitive.

It’s Not The End Of The World If Your Loan Is Declined

Although you may not realise it, it’s actually quite common for first home buyers to get their loan rejected. Loaning criteria are becoming tighter, and banks are more careful than ever. Don’t worry too much if your loan application is declined – there are still options, which we will cover in this first home buyer guide.

Common Reasons For Loans Being Declined

Some of the most common reasons for first home buyer loans being declined include the following:

Forgetting to mention things like credit cards or interest-free loans.
Changing jobs too often.
Changing address too often without good reason.
Having messy bank accounts that are hard to track.
Having uncontrolled spending habits
Trying to buy a unique or ‘difficult’ property, e.g. a house under 40 square metres.
Making too many loan applications.

Ways To Maximise The Chance Of Your Loan Being Approved

There are a few things you can do to maximise the chances of your loan being approved, including:

Checking your credit file and working to improve your credit rating if necessary.
Check any outstanding credit card limits and ensure you have closed any unnecessary credit cards.
Clean up your bank accounts and try and consolidate them where possible.

Remember, it’s not the end of the world if your first application gets declined. You will find another lender who may approve you happily without any drama. If your application has been declined, you should speak to your mortgage broker to discuss your options and next steps.

Choose Your Mortgage Broker Carefully

You can maximise the chances of your first application being approved by choosing the right mortgage broker for your situation. Finding the best mortgage broker involves the following:

Check the broker’s credentials
Check their ownership structure – are they independent or owned by a bank?
Research the broker’s online reviews
See if they have won any awards
Read their blog and other educational material
Explain your needs and see if they understand them
Ask them why you should choose them over a bank
Request their lender panel
Ask about their home loan research process
Ask about their approval and rejection rates

With that in mind, let’s move on to the next section of this first home buyer guide – searching for your dream home!

CHAPTER 5: Set Up Your Search For Success

Is finding a home as simple as asking Google? There are so many real estate websites out there, so which one should you use? Luckily, you don’t have to spend hours trawling through every website you can find. In this chapter, we’ve put together a few simple steps to help you narrow down your search and find the right home for you.

Figure Out Why You Want To Buy

The first step in using this first home buyer guide to search for a property is to think carefully about why you’re buying a house and what you want to get out of it. Consider the following:

Why are you buying this property?
How long do you plan on living there?
Can you afford to maintain this property?
Will you be able to sell this property if you decide to sell it in the future?

Not All Properties Satisfy The Banks

Banks have different lending criteria, so you must think carefully when choosing your first home. If you want lenders to approve your loan, make sure that the property that you’re looking at ticks the following boxes:

It should be at least 50 square meters.
For some lenders, the area needs to be less than 2 hectares. However, not all lenders follow this rule.
The purchase price should be fair; otherwise, lenders may value the property less than what you paid for it.

Make sure that you get a pest inspection and strata report to confirm the condition and suitability of the property for your lender.

Eliminate Emotion

Sure, buying your first home is emotional (hence the need for a first home buyer guide). However, you need to teach yourself to control certain emotions so that they don’t cloud your judgement and lead you to make regretful decisions.

Never rush to buy without thinking things over, and never buy because you’re getting frustrated. Both of these things can mean that you end up with a property that doesn’t meet your needs or which will cause problems in the future. If you feel rushed or frustrated, take a few steps back, relax for a few days and try to focus your perspective.

Buying your first home will probably be one of the biggest decisions of your life, so you need to make sure that you don’t end up regretting it! If you’re having trouble setting your emotions aside, consider using a buyers agent to find the perfect property for you.

Make Sure That Your Search Isn’t Limited

Many people limit their search to places they think they want to live or have lived before. Unfortunately, doing this limits your choices and may result in your dream property not even coming under your radar!

Below, we’ve outlined some of the best suburbs in Brisbane for people in certain situations:

I Want A Suburb That’s Walkable

If you’re a young or independent person who wants a walkable suburb, then go for the city and surrounding suburbs. Fortitude Valley has grown in popularity recently. Bowen Hills and Newstead are also easy walking distance to the city.

I’m A Young Professional

New Farm and Teneriffe are becoming popular among young families and professionals due to their proximity to the city and low-maintenance lifestyles.

I Need Family Friendly

Suburbs like Cannon Hill and Morningside are great choices for people looking to buy their next family home. Both are peaceful and offer easy access to the city.

I Want To Be On The Water

Suburbs like Manly, Birkdale, Wynnum and Lota are bayside suburbs that offer the chance to live close to the ocean, within commuting distance of the city and away from the hustle and bustle of inner suburbs.

We Need Room To Move

If you’re looking for a spacious suburb with easy access to the city and shopping centres, look at Aspley, Albany Creek, Bracken Ridge and Chermside.

I’m Looking For A Starter Home

Finding the perfect first home can be hard. Suburbs like Annerley are becoming popular, with the multicultural lifestyle and proximity to the city. You could also consider Buranda, Moorooka, Fairfield Gardens and Stones Corner.

Ultimately, the type of home you want will dictate the suburbs you start looking in. Figure this out, and then start shopping around and doing some research!

In the next chapter, we will look at in-depth research and valuation in more detail.

CHAPTER 6: Value Accurately

One of the most important (and most confusing) steps in buying a property is house price research. Working out how much a house is actually worth is difficult, and it’s important to realise that listed sale prices are NOT set in stone. You might be able to buy the home for 8-10% less than the advertised price, but how? In this chapter, we show you the exact steps to find out. Let’s dive right in.

Compare Apples To Apples - A First Home Buyer Guide To Property Research

When working out how much a property is worth, the best place to start is by comparing it to similar properties in similar areas. Make sure that you consider the following:

Similar sales within 2km of the home, in the same suburb.
The quality of the build of your property and the ones you’re comparing with
Property type – land/house/unit/townhouse
The number of bedrooms, bathrooms and car parking spaces.
The same or similar land size
The sales that occurred within the last 6 months
The condition of the property, e.g. have there been improvements like a renovated kitchen or a pool?
The distance of the property from facilities and amenities.

Getting this information is essential if you want to get a clear idea about the market value of the house you are interested in.

Compare With Inferior & Superior Properties

The next step is to find 3 or 4 recently sold properties, compare them to the property you’re looking at and categorise them as inferior or superior. This can help you work out a rough value range for the property you want to buy.

Pay Close Attention To The Market

The market is constantly changing. Try to stay up to date with current market trends by following reputable sources like CoreLogic. Look at factors such as supply and demand and economic factors. Be prepared to adjust your expectations and strategy as market conditions change. This might mean being more flexible on price, timing, or other factors in order to achieve your goals.

Research Similar Property Sales

Figure out what similar properties have sold for and research them. Consider how long they were on the market (A shorter time means that the property sold easily), how the asking price changed while they were on the market and how many people were interested in them.

Research Potential Rental Income

As a first home buyer, being aware of what you could theoretically rent a home out for is important. Even if you don’t plan on ever renting it out, your situation could quickly change, and you may need that extra income.

Look for areas with:

Low vacancy rates
Stable or increasing weekly rental
Good rental yields
A good supply and demand balance.

You can research potential rental income by comparing the property you’re looking at to similar properties. In this first home buyer guide, we don’t go into detail about rental income. But you can use a website like realestate.com.au or RentPrice for reliable information.

Avoid Common Mistakes

First home buyers regularly make mistakes when valuing properties. Some of the most common mistakes include the following:

Being influenced by estate agents trying to convince you a property is worth more than it is. Always remember that the real estate agent is working to get the highest price possible for the buyer – they are not working for you!
Completing a poor comparison. Comparing oranges and apples will give you an inaccurate value of the property.
Making emotional decisions. As we covered earlier, you need to control your emotions!
Listening to the media, which isn’t always reliable.

Working out the value of your future home isn’t an exact science, and there are many variables in play. However, the above points will help you get the most accurate estimation possible, especially if you can eliminate emotion from your decisions!

Next, we’re going to go into more depth about the best ways to complete your research so that you can make informed decisions.

CHAPTER 7: Do Your Research

It’s hard being a first home buyer. You may not be familiar with the entire home buying process, which can be complex and overwhelming. That is why we have created this first home buyer guide.

Most other buyers and real estate agents will likely have more experience than you, which may put you in a vulnerable position for overpaying. When you do find a property you like, you may feel like you are missing things or that the property has a critical flaw you are overlooking.

Failing to do your research properly could lead to you buying a home that’s going to be expensive to maintain and nearly impossible to resell. Here are a few things that you can do to improve your knowledge of the property that you’re looking at buying:

Make Sure You Get Building & Pest Reports

Both building and pest reports are non-negotiable when you’re seriously thinking about buying a new property.

These reports check both the structural integrity and presence of pests. They can help you identify problems that aren’t immediately obvious, such as the presence of termites or concrete cancer.

Building and Pest Reports can save you a lot of money in the future. Wherever possible, hire your own pest and building inspector to ensure you’re getting an honest assessment.

Be Aware Of Flooding

A lot of Brisbane properties are susceptible to flooding.

If the property you are looking at buying is on a flood plain, it is extremely important to get a flood report and fully understand it. Flood susceptibility affects both insurance premiums and resale value.

Get a free flood report on the Brisbane City Council website.

Check Commute Times

If you plan on travelling to and from work daily, you need to be aware of commute times.

Most property inspections take place on weekends when people are not going to work, so you won’t get a true picture of commute times. You should always do a weekday morning and afternoon check that coincides with the times that you will be commuting.

Research The Suburb & Its Surrounds

It’s a good idea to do some research into the suburb where you’re planning on living, especially if you’re a first-home buyer.

Tools like WalkScore can give you a great idea of how long it will take you to get to places like train stations or supermarkets.

Microburbs is another great tool that can help you understand the local area. It will give you a range of demographic data (that comes directly from the census) to help you understand if the area is right for your lifestyle.

WARNING: Real Estate Agents Aren’t Your Friends!

As a first home buyer, it’s easy to fall into the trap of believing everything that a real estate agent says, especially if they’re friendly and approachable. However, there’s one thing that you need to remember:

“Real estate agents get paid according to how many properties they sell and how much they sell them for.”

This means they often sweeten things up a bit, encouraging you to purchase a property by glossing over negative points and focusing on the positives.

The next section of our first home buyer guide is very essential, as it shows you how to deal with real estate agents…

A First Home Buyer Guide To Dealing With Real Estate Agents

Good real estate agents will work to get the best price possible for the seller.

They won’t waste time on uncertain or unwilling potential buyers, so make sure that you show your interest early.

If you’re friendly with the agent, they will give you more information. Ask questions and find out as much as you can about both the vendor and other buyers. At the same time, keep your position guarded as much as possible and share very little information with them.

What Sort Of Questions Should I Ask A Real Estate Agent?

Asking the right questions will help you get a clear picture of the circumstances surrounding the sale of a property, making your decisions as a purchaser a lot easier.

Consider asking the following:

Why is the property for sale? Understanding why a property is up for sale will help you determine how desperate the owner is to sell and how much you can offer. It will also help you work out strategies to maximise the chances of your offer being accepted.

How long has the property been for sale? Generally, the first 3 weeks that a property is for sale are the most interesting. After about 2 months, interest stagnates, and it can be hard to find a buyer – perhaps due to problems with the property or a price that’s too high. If you can, try and find out how long the property has been on the market and why it’s been up for so long. This information can help you in negotiations.

What was the original asking price? Figure out how much the owners were originally asking for the property and what offers have already been made. This will help you work out a fair price to offer – something that’s sometimes hard for first home buyers!

Are the sellers willing to negotiate the price? If the real estate agent says yes, you will be well-equipped to make an offer lower than the asking price. Generally, Australian properties tend to sell for about 10% less than the asking price.

What’s the lowest price the owners will accept? The real estate agent won’t always give you a clear answer to this, but if they do, it will help you figure out whether or not you can afford the property.

Next Step

By now, you should know how to research a suburb and the surrounding area, determine rental potential and calculate a property’s value. The following checklist should help:

Research your suburb and surrounding area.
Research rental income per week
Calculate rental income
Research recent property sales.
Determine the property’s value.
Confirm value with a free RP Data valuation.
Order a bank valuation with Hunter Galloway.

In the next chapter of our comprehensive first home buyer guide, we’re going to start looking at the best way to make an offer on a property.

CHAPTER 8: Make An Offer

By now you might have found the perfect home, worked out how much it’s worth and braced yourself to make an offer. Working out how much to offer is hard. Offer too little, and you might miss out. Offer too much, and you will pay more than you need to. However, there are a few tricks and tools included in this first home buyer guide that you can use to help you make the perfect offer.

Be Confident In Your Research

If you’ve done the necessary research and have worked your finances out, you can offer with confidence. Before considering an offer, make sure that you’ve got the following:

A pre-approved loan that covers the amount that you’re willing to offer.
A knowledge of the property’s value that you can base your negotiations on.
A building and pest report.
An idea of potential rental income.
A flood report(if relevant).

Negotiation Fundamentals

Negotiation is about finding a balance between what the owners want to sell their property for and what you’re willing to pay. Knowing the seller’s situation and why they’re selling can give you negotiating power, helping you get a better price.

Ask Open-Ended “What” & “How” Questions

Asking approachable and non-threatening questions can give you information about the seller that can help your negotiations. Remember to ask the real estate agent the questions outlined in Chapter 6.

Make sure you remember that the real estate agent is trying to (1) sell the property as fast as they can and (2) get the best price that they can. Use this knowledge to help shape your questions and put yourself in a position of power.

Making Your First Offer

Once you’ve made an offer on your first home, the real estate agent will usually ask you to complete a contract of sale. Make sure that you include all of the relevant information:

Your full legal name.
The sale price.
The deposit.
Finance, building and pest terms.
Settlement dates.
Lawyer details.

Consider how to make your contract competitive by offering faster finance or settlement. Make sure that you talk to your mortgage broker about these things.

Signing A Contract Of Sale

A contract of sale shows that you’re serious about your offer. It doesn’t mean that the seller has to accept your offer. Again, do whatever you can to make your contract as competitive as possible, or they may accept someone else’s offer over yours.

Preparing Counter Offers

Often, the real estate agent will call you back after you’ve made your initial offer and tell you that it hasn’t been accepted. The seller may make a counteroffer, in which case you’re in luck! It means they are willing to negotiate. In this case, you can use a bargaining technique such as the Ackerman Bargaining technique to get a price you’re happy with.

Negotiating A Price After Inspection

If your building and pest inspections show minor problems, you can show them to the seller and use them to negotiate a lower price. Things like broken windows, wet rot in the bathroom or kitchen cupboards, or poor drainage can all net you a lower price but really aren’t significant problems in the grand scheme of things. You don’t have to walk away from these minor problems.

Be Prepared To Walk Away

As we’ve mentioned a few times in this first home buyer guide, you must make sure you can distance yourself from your emotions and make informed decisions. Being able to walk away from a property if the seller isn’t willing to lower their price is crucial. Remember, you would have set your walk-away price at the very beginning. Stick to it…

In the next chapter, we’ll take a brief look at buying at auction. If you’re not planning on doing this, you can skip straight to Chapter 10 – settlement!

CHAPTER 9: A First Home Buyer Guide To Buy At Auction.

Buying at auction can magnify the stresses associated with buying your first home. If things go pear-shaped, you could end up overbidding and being stuck with a new house that you can’t afford to pay for. Auction results are final, so you need to be very careful and make sure that you stick to your initial budget so you don’t run into trouble. That is what this first home buyer guide is here for..

In this chapter, we’re going to walk through the auction process, how property auctions work and how you should approach auctions to make sure you get maximum return.

Understand The Auction Mindset

In Queensland, you need to register as a bidder before the auction. However, other states don’t have the same requirements, so do your research.

There are two main reasons for properties being put up for auction:

The property needs to be sold ASAP.
Creating a deadline can increase the competition for the property, inflating prices.

There are no second chances at auctions, so it’s crucial to set your budget and stick closely to it. If you’re the winning bidder, you will have to pay even if you can’t afford it.

If you’re the highest bidder, but the price doesn’t meet the reserve, you will be the first in line to negotiate with the seller.

Know The Property’s Value

It’s important to make sure that you know a property’s value before you head into an auction; otherwise, it’s hard to set a clear budget.

Did you know that It’s illegal for sellers to give you a price guide for an auctioned property in Queensland. However, if you’ve got this far, you should know how to value a property on your own. If not, head back to Chapter 6 to refresh your memory!

Make Sure Your Finance Is Sorted

You need to make sure that your finance is approved before you bid on a property at auction. You can’t pull out if you win an auction, so it’s important to work with a decent mortgage broker to source finance and get a proper pre-approval before you even think about bidding.

Have A Support Team Ready

Since buying a house is expensive, you must be prepared beforehand. Get a home buying support team like a mortgage broker, a lawyer or conveyancer, a building and pest inspector etc.

Consider speaking with a lawyer to ensure the contract is in order before signing anything. Likewise, you need to make sure that you’ve got pre-approval for finance that fits with your budget. Discuss the property you’re considering buying with your mortgage broker to ensure it meets the lender’s criteria.

Buyers Agents

Many people use buyers’ agents to help them purchase their first home. Buyers’ agents can help you source, research, and even bid on properties. A buyers’ agent can cost anything from $2000 to $10,000, but they can help you get better prices and save you a lot of time.

Support Team Checklist

Find an expert mortgage broker and get loan pre-approval.
Speak to a lawyer to get the contract of sale checked.
Get a building and pest inspector to make sure there are no major issues with the property you want to buy.
Think about using a buyers’ agent.

Auction Terminology

Here’s a quick outline of a few potentially confusing terms you might encounter when buying your first home at auction.

Reserve price— is the lowest price the seller will accept. You won’t know the reserve price before the auction.
Vendor bids— are bids from the seller that are designed to increase the price until the reserve price is reached. They are allowed.
Dummy bids—are bids designed to artificially increase the price. Dummy bids are illegal throughout Australia.

Successful bidder—is the person who wins the auction. A successful bidder will have to sign a legally binding contract immediately.

Know Your Competition

Make sure that you arrive early on the day of the auction. Get comfortable with the setting and other potential buyers. Stand up straight and appear confident; this can scare other buyers away and help you secure a good price.

Don’t Tell The Real Estate Agent Much

As we have mentioned before in this first home buyer guide, real estate agents aren’t your friends. They work for the person trying to sell a house and will try and get the best possible price. In some cases, they will lie or twist the truth in an attempt to inflate the price, so you need to make sure that you question everything they tell you.

Similarly, you need to make sure that you don’t give the real estate agent any information that they could use to leverage the price up. Ask them lots of questions, and only answer their questions when you have to.

Bid Slowly

Bidding is a very psychological game. When you’re bidding, say the full price that you’re bidding slowly and loudly. Being confident can help put other potential buyers off.

Don’t bid hard at the start of the auction because this can excite people and give the auction momentum. Instead, try and wait until the reserve is met or until there’s no other interest.

Don’t Tell Anyone Your Price

Never tell the real estate agent or anyone else your price before you start bidding. Set a budget slightly above a logical number, as this could give you an advantage over people with similar budgets. For example, instead of $450,000, you could budget $453,200.

Auctions are scary, so getting a friend or family member to bid for you can be a good idea. Alternatively, use a buyers agent.

Finally, if you’re bidding yourself, make sure that you’re in a position where the agent can see you and where you can keep your eyes on all the other bidders in the crowd.

Don’t Be Afraid To Walk Away

Auctions take a long time to prepare for, but they are usually over in a matter of minutes. However, you still need to stick closely to your walk-away price; otherwise, you will end up paying more than you wanted to or could afford. It’s called a walk-away price for a reason.

First Home Buyer Guide Auction Checklist

When you go to an auction, you need to go there assuming that you’re going to win. As a first home buyer, you can’t afford to be scared. Use the following first home buyer guide checklist to make sure that you’re ready to go:

Complete the property inspection checklist
Arrange building and pest inspection
Arrange home loan approval
Get a property valuation
Complete market research
Understand auction results in your area
Decide on your highest and final price
Obtain a copy of the contract of sale
Get legal advice about the terms and conditions of the contract
Arrange title search and other checks with the conveyancer, e.g. to see if there are any encumbrances.

Confirm with the real estate agent how much deposit is required and how to pay it. If you win, you’ll need to pay your deposit on the day. Make sure you know how much you will need to pay and that it’s accessible.

Bonus: Make An Offer Before Auction

In some cases, sellers will accept offers before a property goes to auction. The following steps will give you the best chance of having a pre-auction offer accepted:

Submit an offer in writing to the real estate agent.
Negotiate over email or in writing.
Sign the contract of sale.
Get your finance approved.

Now it’s time to look at the last step of the buying process in this first home buyer guide– settlement!

CHAPTER 10: Finalise Settlement

Buying your first home can be difficult, but you’re almost there! If you’ve reached the settlement stage, you’ve done most of the hard work. In this chapter, we will look at everything you need to know about the settlement process.

Sign The Contract Of Sale

The contract of sale is a legal document prepared by a lawyer or conveyancer. In Brisbane, standardised property contracts are available, which make it easier to finalise a sale. Standard contracts include a cooling-off period, but you can customise them to include additional clauses if needed.

Note: There is no cooling-off period when buying at auction.

What is included in a contract of sale?

A standard contract of sale will usually include the following:

Certificate of the title information
Offer date
Warnings, such as the necessity for smoke alarms
Settlement date of the intended property
The cooling-off period
Information about furnishing and fixtures
Improvements to the property
Property address
Loan details, such as the terms and conditions of the payment and initial deposit
The price of the property
Name of the seller
Purchasing party information
Information about the selling agent

Speak with your lawyer before signing anything because a signed contract of sale is final.

Different states in Australia have different rules surrounding contracts of sale. Make sure that you’re aware of the rules so that you do everything right the first time. After reading this first home buyer guide, speak to your lawyer to clear up anything you’re confused about.

Pay Your House Deposit

Once you’ve signed the contract of sale, you will need to pay your deposit. However, what you may not know is that deposits in Queensland are paid in two parts. The first part is paid when you sign the contract of sale, and the second is paid upon the completion of building and pest reports and finance approval.

The first deposit is called a holding or initial deposit and is usually only about $500-$2000. It needs to be paid within 3 business days. The balance deposit is larger and is paid later in the settlement process.

Get Formal Approval

Once you’ve paid your initial deposit, you need to work with your mortgage broker to get your loan formally approved. You will need to:

Get the contract of sale to your mortgage broker.
Provide them with any documents that are needed.
Get your mortgage broker to organise a bank valuation.
Receive formal approval from your loan provider.
Let your solicitor or conveyancer know that everything’s gone through!

Once you let your lawyer know that your loan has been properly approved, they can work towards formally finalising the settlement process.

What if my loan is declined?

It’s not uncommon for a first home buyer to have their loan declined, and it’s not the end of the world when it happens. There are other options open to you:

Ask your mortgage broker about applying for a different loan.
If you signed a contract of sale subject to finance, your solicitor can terminate the contract and get your deposit refunded.

What happens after formal approval?

Once your finance is approved, you can get the property in your name. You and the lender will agree to a date to transfer the property. Once you’ve done this and completed the other formalities, the property becomes yours.

Congratulations, you’ve bought your first home!

Get Insurance Straight Away!

It’s extremely important to get insurance on your new house as soon as you sign the contract of sale. Many people don’t know it, but a purchaser is responsible for insurance from the moment the contract is signed.

In many cases, your lender will want proof that your property is insured, so it’s in your best interest to get it sorted out as soon as possible.

How much should you insure for?

Deciding how much to insure your first home can be hard. Basically, your insurance needs to cover the cost of labour and the raw materials needed to repair your house if it gets damaged. Most insurance companies will assess the value of your property independently, but you need to ensure that you aren’t underinsuring.

Arrange Building & Pest Inspections

Yes, we’ve said it often in this first home buyer guide, but it’s essential to get your building and pest reports sorted as soon as you’ve signed a contract of sale. These will help you assess the condition of the property and will help you make sure that there are no underlying problems that you weren’t aware of.

If there’s an issue with the building and pest inspections, you can inform your solicitor, and they can terminate your contract.

Sign Your Loan Documents

Your mortgage broker will help you organise a time to sign your loan documents. The documents you need to sign include the following:

Home loan contract
Mortgage document
Direct debit agreement
Any other forms the bank wants you to sign

Get Power Connected & Mail Redirected

If no one has lived in the property before you move in, the power probably won’t be connected. Plan ahead and make sure that things like electricity, gas and internet are connected and working; otherwise, you will be in for an uncomfortable few days when you move in.

Settlement & Getting The Keys!

Congratulations, by now, you’ve sorted out everything you need to!

Settlement should occur on the agreed date, and the property will be transferred into your name. Once this is done, you can rest easy – you’re now the owner of your first home!

What Next?

If you’ve followed the steps outlined in this first home buyer guide, all your bases should be covered. However, you should consider getting a home loan health check every 12 months. A home loan health check is a great way to ensure that you are getting the most out of your loan and that you are not paying more than you need to. For example, a home loan health check can help you see if your interest rate is still competitive and whether you can save money by refinancing or renegotiating your loan terms.

This is a crucial part of smart loan management, and your mortgage broker should be able to help.

BONUS CHAPTER. First Home Owners Grant.

As a first home buyer, We are going to cover the most important one, in this last section of the first home buyer guide.

You may be eligible for a first home owners grant. In Queensland, grants of $15,000 are available to first home buyers who are buying or building a new home. The property can’t have been lived in; otherwise, the first home owners grant won’t apply. In this chapter, we will walk you through the best and worst of the First Home Buyers Grant.

What Are The First Home Owners Grant Rules In Queensland?

The most important thing when it comes to qualifying for the First Home Owners Grant is that you can’t have ever owned property or a share in property in your name in Australia.

Additional eligibility criteria include:

If you’re purchasing a home, it must be brand new and worth less than $750000.
If you’re building, the price of the land and the house needs to be less than $750000.
You will also need to live in the property for at least 6 months of the first 12 months that you own it.
The grant can be used for townhouses, units or houses.
You must be an Australian citizen or permanent resident.

Can My First Home Buyers Grant Be Used As A Deposit?

The good news is that your $15,000 grant can be used as part or all of your house deposit! However, some banks won’t consider grants as genuine savings, meaning you might still need to contribute some of your own cash.

What Could Make Me Ineligible For The Grant?

Some of the things that could make you ineligible for the First Home Owners Grant include:

Previous home ownership in Australia.
Buying an old property.
Buying or building a property that’s worth more than $750,000.
Your age and citizenship status.
Buying an investment property

Applying For The First Home Owners Grant

As you can see, the Queensland First Home Owners Grant is relatively straightforward and could help you get enough money together for a deposit on your first home. Speak to your mortgage broker for more information!

Mortgage brokers like Hunter Galloway can help you complete a First Home Owners Grant application. You must fill out a First Home Owners Grant application form and include all necessary information.

First Home Buyer Guide To Stamp Duty Concession

As a first home buyer, you can also claim a first home concession for transfer duty. This means you can save a significant amount on stamp duty, even if you’re buying a property that isn’t eligible for the first home buyers grant.

However, there are additional conditions linked to the first home concession, so you need to make sure that you do your research and are familiar with them. One of the biggest conditions is that you have to live in the home for at least a year without renting out any rooms.

If you are looking to build or buy a home in Queensland using the First Home Owners Grant, our team at Hunter Galloway can help.

First Home Buyer Guide Conclusion

In conclusion, purchasing your first home can be both exciting and overwhelming. It involves many steps—setting a budget and getting pre-approved for a mortgage, finding the right real estate agent, and conducting thorough inspections.

However, with patience, planning, the help of professionals and going through a first home buyer guide like this one, you can successfully navigate the process and achieve your dream of homeownership. Remember, your first home is a big investment!

Our team here at Hunter Galloway helps first-time home buyers navigate the home buying process.

Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.

If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.

More Resources for first home buyers

Ready to take the next step toward buying? We’re happy to help. Schedule a call today with a Home Loan Expert from Hunter Galloway, the home of home buyers.

The information in this first home buyer guide is general in nature and should not be considered as advice. Before you act on this information, you must seek independent legal and financial advice.

First Home Buyer Guide

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