Ready to buy that first home? Some things to bear in mind:
CONFIRM WHAT YOU CAN AFFORD
A mortgage broker, like MCP, can provide you with the information to understand your financial position. This will include borrowing capacity, taking into account current and future changes to your circumstances.
DO YOUR OWN RESEARCH
Have a long term focus, as property is a very illiquid asset! Talk to people about their experiences, and remember property doesn’t always just go up in value.
Widen your knowledge across how property ownership will impact you, and understand where you are buying too.
GET LEGAL & PROPERTY ADVICE
After you have done your research, confirm your findings with someone that knows property. Get access to legal representation to properly review a Contract of Sale.
UNDERSTAND ANY GRANTS AVAILABLE
There is a range of Government support for First Home Buyers. These include the First Home Guarantee (formerly First Home Loan Deposit Scheme) and the Family Home Guarantee. Make sure you are up to date with the incentives provided by State and/or Federal Governments.
PARENTAL SUPPORT
Under some circumstances, your level of deposit may mean you will have to access Lenders’ Mortgage Insurance ("LMI"). An alternative may be to involve a parent that may want to support you by way of a loan or guarantee. This person(s) provides a guarantee for your home loan, usually a family member. This guarantee is usually limited, and is secured against the equity in their own property.
This is best considered when you have the income to service the commitment of the proposed new lending. The support of this type can be a worthwhile option for first home buyers, who would otherwise require LMI.
For more information on this and other matters, have a look at our Property Guide e-book too.
https://www.mcpfinancial.com.au/wp-content/uploads/2018/02/Property-Guide-2017.pdf