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Things to know if you’re a first home buyer

19 April 2017

Things to know if you’re a first home buyer

Buying your first property can be daunting, however with our easy tips we’ll help you become a home owner sooner than you think!

Here are a few things to consider:

1. Put aside a generous budget

The bigger the deposit, the better when you’re saving for a home. Therefore, a good goal to aim for would consist of 20% deposit or more in savings, including coverage of added costs. If you are borrowing more than 80% of the property’s value from the bank, you may be required to pay LMI (Lender’s Mortgage Insurance). Avoid these extra costs by saving a bigger deposit to lower your LVR (Loan to Value Ratio).

2. Understand the costs

As well as saving for a deposit to put on the property, you’ll need to put aside more than a deposit to cover the extras. Some costs associated with purchasing a home include, stamp duty, legal fees, building & pest inspection fees, valuation fees and other government registration fees.

3. Research your areas of interest

Write down a list of areas you are aiming to buy in and research the potential benefits or disadvantages you’d encounter living there. For example, is the price of the property within your budget, are you satisfied being close or far away from your friends and family?

4. Research home loan products

Interest rates and fees vary according to how basic or feature-filled the home loan product is. It is worth having a look around different Home Loan packages or even negotiating with the lender to receive a better deal. Understand the advantages of home loan features and how it can benefit you in the long run. 

5. Learn the importance of comparison rates

Some products will show you the lowest interest rates that are filled with fees, which in the end may not be as cheap as expected. Comparison rates show this by displaying in total the annual interest rate as well as upfront and on-going fees.

6. Know your credit history

If you've ever applied for credit or a loan (whether or not you went ahead), you are likely to have a credit report. It’s a good idea to check your credit report yearly and make sure you’re in the good books when applying for a loan, otherwise you may receive a high interest rate or even worse – be declined.

7. Explore government assistance & DHOAS

Finally research online what schemes you’re eligible for and contact your ‘State Revenue Office’ to apply. Certain states and territories offer additional incentives. At Australian Military Bank, we provide DHOAS Home Loans that are designed to suit the needs of eligible Australian Defence Force home buyers.

Need assistance, or just want to talk to our experts?

Visit us in branch and talk to our lending specialists. Alternatively, you can call us on 1300 13 23 28 to help you navigate through the home loan lending process for your new purchase.

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