FIRST HOME BUYERS
At Finance Studio we realise that purchasing your First Home can be one of the most exciting and challenging purchases you will ever make. It is our goal to help you through the process and make it as easy as possible to understand all you need to know prior to purchasing.
To make it easier to understand all you need to know about purchasing your First Home, we have put together some steps that will help you through the process.
Six Steps to Realising Your Dream
Step 1 - Planning and Saving
Probably one of the most important steps is planning for your First Home purchase. Without the proper planning in place you may find yourself disappointed if you do not achieve your goal. Gone are the days where you did not need a deposit and could use the First Home Owners Grant to cover your purchase costs.
The minimum deposit required by Lending Institutions in Australia currently is between 5-10% of Genuine Savings, which need to be saved over a minimum of 6 months. Now genuine savings can be hard to understand for some borrowers, what it means is constant money going into a dedicated savings account and trying to keep those funds in the account under you are ready to purchase. Lending Institutions will scrutinise your Bank Statements and if they see Lump Sum Deposits going into the account they will need an explanation of where these funds have come from as they may not class them as Genuine Savings. A good example of what does not constitute Genuine Savings is a Tax Refund.
To help with your savings goal, it is important to start putting together a budget. This will be both important now and into the future. One thing to remember when purchasing your First Home is that you will have this financial commitment for many years to come and interest rates change all the time. A lot of First Home purchasers are more excited about just getting into their home rather than realising the financial commitment that they are about to undertake.
Step 2 - Finance
Approach Finance Studio to look at your options and see if you are suitable to obtain finance. During this process we will collect information through a Customer Fact Find then do a Client Needs Analysis to make sure that we find the right solution for you when you are ready to obtain finance.
We see a lot of potential First Home Buyers whom negotiate a contract to purchase their First Home without speaking to a professional about finance and there is nothing worse than seeing a client fall in love with a property and then finding out that they do not qualify for finance.
Also we do see some First Home Buyers who approach a Finance Institution directly and maybe are knocked back due to their lending policies. This does not necessarily mean that they do not qualify for finance, every Financial Institution has different policies in place and it is our job as a Finance Professionals to find the right solution for you through sorting through all of the available options.
Step 3 - Finding the Right Property
This can be one of the most exciting and most stressful parts of the process. Everyone has a different ideal of what property suits them and trying to find the right one is sometimes an impossible task and within the right price range.
Find a property that you can afford, there is nothing wrong with starting with a smaller and more affordable property then upgrading when you need more space later on. There are many choices with regards to purchasing property, you need to decide do you want to purchase a House, Unit, Town-House or even purchase land and construct a brand new home to live in.
When you think you have found the right property for you let Finance Studio know and we can use our resources to produce a comprehensive report on the property so that you can make an informed decision on what you would like to pay for that property. Our clients find these reports exceptionally helpful when deciding which property is right for them.
When you have found the right property, you then will start negotiating the purchase price. Once you are happy with the price and prior to signing the contract get your Solicitor to look over the contract to make sure that it is correct, this can save some costly mistakes later on.
Step 4 - Organising Insurance & Inspections
Now that you have the contract in place in some states Insurance is required within 24hrs of the contract being signed. Get quotes from 3 Insurance Companies and make sure that you are getting quotes for exactly the same features. It is important that you think about the location that you are purchasing in and what environmental issues make impact of your property such as Flood, Bushfire and Earthquake. Take cover that is suitable to your needs.
You will also need to look at booking in a Building and Pest Inspection to go through the property and make sure that there are no problems with the property that you have purchased. Some people chose not to get a professional in to do this and this may eventuate to a very costly mistake.
Step 5 - Organising Finance for the Purchase
Let Finance Studio take care of this for you, as per your initial meeting we will now look at getting your plan in place and finding the most appropriate finance to suit your needs. The final step is the Preliminary Assessment to ascertain if we have found suitable finance for you. Once suitable finance has been obtained we will organise all necessary forms and documentation for you then submit your application to your chosen lender.
Step 6 - Congratulations your Loan is Approved
Once you have been Unconditionally Approved by your chosen lender, we will inform you straight away followed by an Approval Letter to your Solicitor. You will within a few days then receive Loan Documentation from your chosen lender. It is very important to read through these documents carefully and make sure that you understand them fully.
At Finance Studio, we will liase with both the Lender and the Solicitor through till settlement. If there are any concerns with the settlement date the Solicitor will advise accordingly so that you know each step of the way what is happening.
First Home Owners Grant
This is administered by the Office of State Revenue in each State. Every state has different rules and conditions and it is very important to read all information regarding the grant to make sure that you are eligible.
If you are eligible to apply for the First Home Owners Grant, Finance Studio will organise all the necessary forms and submit to the bank on your behalf. If you are purchasing a established home then the grant will be available on the settlement day. There are different rules for Construction which we will go through with you in the interview.
Stamp Duty on the Purchase
As a first home buyer you may be exempt to pay stamp duty on the purchase. Again this is administered by the Office of State Revenue, the forms are completed at the Solicitors. Something to be careful about is making sure either party has never owned a property not just in Australia but anywhere else in the world.