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Tips for First Home Buyers

The hardest thing for most first home buyers is saving a deposit. Well the good news is that you no longer need a deposit or genuine savings. Genuine No Deposit Home Loans are now available and have made life a lot easier for first home buyers and investors alike.

Suitable Loans for First Home Buyers

• 100% loans: Borrow 100% of the purchase price. Depending on what state you're buying in, the FHOG can be used to cover most of the fees and mortgage insurance.
• 97/3 loans: You need 3% genuine savings but your mortgage insurance will be much lower. In addition the mortgage insurance can be added on to the loan taking it up to almost 100%
• 95/5 loans: If you have 5% deposit, none of it needs to be genuine savings. It could be a gift, inheritance etc. Mortgage insurance will be lower again and can be added to the loan taking it up to around 97%
• 80/20 loans: Once you have 20% deposit no mortgage insurance is required                                     at all.  
• Family Equity Loans: If you have a family member willing to put up their own property as security then Family Equity Loans are great. For example your parents own their home. Your parents only need to give the lender a limited guarantee for 20% of your purchase price plus fees. They are only responsible for 20% of the debt and as your equity increases with time they can be released from their guarantee. In effect you are borrowing 100% but there is no mortgage insurance- a great deal!

Before you go shopping for your first home, you really should have your finance pre-approved. Below are the advantages of obtaining a pre-approved home loan.

Advantages of Pre-Approvals

• Free of charge.
• You are not obliged to accept the finance.
• Finance is subject only to the valuation of the property being purchased.
• Valid for around 3 months (easily extended)
• Enables you to negotiate a much lower price than someone without finance approval.
• Or gives you a much greater chance of having your offer accepted.
• Enables you to go shopping for a home with confidence.
• Final unconditional finance approval is much faster as the only thing that needs to be done is to value your property.
• Allows you to swoop quickly if you come across a bargain.

How to Get a Pre-Approval

This is simple. Channel Direct Home Loans will arrange this for you.   Once your paperwork is in place, a pre-approval takes around 5 working days, and then you can go shopping for a home.