Buying your first home is one of the proudest & most exciting moments of any person’s life. But it’s also one of the most daunting and stressful. It will be one of the biggest financial decisions you’ll make in your lifetime, so it pays to have someone by your side through the buying journey, making sure you understand every part of the process.
At Shore Financial, our priority is making sure you get the support you need. We will assist you through the entire journey, from your initial property search, all the way to settlement. We work for you, not the lender and will ensure you find the right loan for your circumstances at the lowest rate available.
As leading financing experts, we are here to guide you through the process, making it less confusing and ensuring you feel confident every step of the way.
As a first home buyer, you may be eligible for both federal & state government support. Below shows the official schemes on offer & eligibility criteria.
Traditionally 20% of the property purchase price is required as a deposit, however it depends on the type of home loan, strategy and lender you select. Generally, you have to pay Lender’s Mortgage Insurance if your deposit is under 20%.
Howerever there are some exceptions to the rule:
And we know that you’ve probably got a lot of questions that need answers.
How do I know how much I can afford? What type of loan should I choose? Can I still buy a home if I don’t have a 20% deposit?
We are here to help guide you through the process.
This is a great place to start! The amount you can borrow will be based on your unique set of financial circumstances.
Your income, assets, liabilities and credit history can all affect your borrowing power and each lender will have a different set of criteria.
Our home loan borrowing power calculator can help give you an idea of how much you can borrow.
There are several government grants and schemes available to assist first home buyers with getting into the property market sooner. Below shows the official schemes on offer and eligibility criteria.
There are a number of extra, often seemingly hidden costs buyers need to be aware of:
Applying for a home loan can feel overwhelming, but at Shore Financial, we guide you every step of the way. Here’s a general step-by-step breakdown:
1. Get in touch: Meet with a mortgage broker to assess your situation and borrowing power.
2. Pre-approval: Once you’ve submitted documents (like payslips, ID, and expenses), we’ll help secure pre-approval from a lender.
3. Find a property: Start house hunting with confidence, knowing your budget.
4. Make an offer: When you find the right place, you can make an offer or bid at auction.
5. Formal approval: Once your offer is accepted, your broker submits the final paperwork for unconditional approval.
6. Settlement: After approval, your solicitor/conveyancer will help with contracts and settlement. The loan is funded, and you get the keys!
In most cases, you’ll need at least 5% of the purchase price as a deposit. Keep in mind, lenders may also require you to cover upfront costs like stamp duty and legal fees. If you have less than 20%, you may also need to pay Lenders Mortgage Insurance (LMI), unless you’re eligible for a government scheme that waives it or have a Guarantor. There is also a 2% deposit home loan option available via our Oceania products.
The answer is yes, if you have a guarantor (often a family member) who provides security (like their property) to support another person’s home loan. This enables borrowers, especially those with smaller deposits, to borrow 100% of the property price plus costs and avoid paying lenders mortgage insurance. However, being a guarantor means taking on significant responsibility as they become liable for the loan if the borrower defaults.
A home loan pre-approval (or conditional approval) is an unofficial assessment of your borrowing capacity – a lender tells you whether it would be likely to give you a loan, and for how much. It’s a good idea to get a pre-approval before you start looking for a home – that way, you know how much you can spend.
This is determined by your lender and loan contract. Typically, the interest cost of your loan is calculated daily on the outstanding balance. For example: daily interest on a $600,000 loan with a standard variable rate of 7% p.a. is: ($600,000 x 7%) / 365 days = $115.07
Most loan types require the actual loan amount (principal) to also be paid back. This amount will be added on top of the interest payment.
Each has it’s advantages. Fixed rate loans offer stability in repayments, while variable rate loans fluctuate based on market conditions. Consider your financial goals and strategy with one of our experts before deciding which is right for you. Our video below will explain the difference between fixed and variable interest rates.
Principal and Interest simply means that you pay a portion of the loan balance in additional to the interest charged over the agreed period. You essentially pay back the loan over the term of the mortgage.
Interest only is when you’re paying the interest on the balance with no principal over an agreed period. Our video below runs through how to structure your loan.
An offset account is a separate transaction account that’s linked to your home loan. You can use it as your everyday bank account, with easy access to your funds and the ability to make deposits and withdrawals whenever you want to. It also gives you the benefit of potentially reducing interest payable on your home loan.
Any money you have in your account is ‘offset‘ against the balance of your home loan, meaning you only pay interest on your home loan balance minus the balance of your offset account. As interest is calculated daily and charged monthly, the more money you keep in your offset, the less you pay in interest. But that also means that as your balance rises and falls, so does the amount it can reduce the interest on your home loan.
A redraw facilities gives you the ability to make extra repayments in addition to your minimum fortnightly or monthly home loan repayment. These additional funds can be taken out (or redrawn) if you need them for renovations or to cover an unexpected expense.
The money in your redraw facility counts against the balance of your loan loan, which lessens the amount of interest you pay. It’s effectively a pool of funds comprising your extra repayments that sits in your home loan account on top of the balance. Keep in mind that these extra funds kept on your loan balance will reduce with regular repayments over time.
Lenders Mortgage Insurance is a fee you pay to the lender if you borrow more than 80% of the value of your property. It’s the insurance the lender takes out for the mortgage to protect itself, but it also allows the borrower to get into the market with a smaller deposit. The larger the deposit you have, the less your lenders mortgage insurance will be. Depending on the loan type and amount, some lenders will allow you to add the cost of this insurance onto the loan so that you don’t have to pay for it upfront.
Maintain a good credit history, reduce existing debt, save for a larger deposit and ensure stable employment. A Shore Financial mortgage broker can also help you find lenders suited to your financial situation.
There are several benefits of using a mortgage broker over going directly to a bank:
Yes! There are several government incentives, including:
Your broker can help you understand what you’re eligible for and guide you through the application process.
Typically, you’ll need:
Your borrowing capacity depends on factors like income, expenses, savings, debts, and credit history. A mortgage broker can calculate this accurately and help you explore different lender options.
Yes, through a guarantor loan, your parents can use the equity in their home to help you avoid LMI or increase your borrowing capacity. This option carries risks and should be carefully considered with expert advice.
We appreciate your message and a Shore Financial Adviser will respond to you within a few short days. In the meantime, here’s a few links to keep you occupied.
We appreciate your message and a Shore Financial broker will respond to you within a few short days. In the meantime, here’s a few links to keep you occupied.
