A new law designed to help first-home buyers has come into force recently.
First-time buyers will now be able to increase their savings in the Federal Government’s First Home Super Saver Scheme from $30,000 to $50,000.
Almost 27,000 Australians have been using the scheme, which allows them to make voluntary contributions to their super that can later be used to buy a home. A total $371 million has been released by the Australian Taxation Office since the scheme began in July, 2018.
If you’re thinking of buying your first home, don’t make the mistake of beginning by spending weekends in search of your dream home.
That part of the journey will come soon enough, but it’s not where you should start. Instead, you need to focus on securing your finances, or you’ll never be sure how much you can afford.
As an experienced mortgage broker, I can step you through some of the best products that will help ensure your ambition to own property will not have a significant impact on your lifestyle.
And if you feel overwhelmed by the paperwork that’s involved with applying for a loan, I can help you there, too.
Below is a list of the initial milestones you must reach to obtain your mortgage. I hope you find my tips useful.
Save for your deposit
This is an essential first step. You’ll prove to yourself you have the financial capacity and discipline to meet your mortgage repayments. Lenders are looking for at least 10% of your requested loan to be covered by a deposit. Ideally, you’ll have 20%, or a lender will insist on you taking out lender’s mortgage insurance. This protects them from you defaulting on the loan but costs you tens of thousands of dollars over the lifetime of a loan.
Know your expenses
Lenders will focus on your earnings, longevity of employment and monthly expenses for the 12 weeks leading up to the loan application. Be honest with yourself.
Keep cash flowing
Carefully manage your outgoings. Pay off as much debt as possible and don’t swap jobs immediately before seeking a loan. That could send you back to square one. Don’t crush your cash flow by buying a car, as that will drag down the amount of money a lender will give you.
Credit rating
Apply for your credit rating to show the lender when the time comes. If you don’t have a good rating, then we can discuss ways to mitigate this challenge.
Once these goals are achieved, we’re ready to start talking to a lender!