Becoming a first home buyer

Buying your first home is an exciting, but big step to take and one that comes with many questions and decisions. The first big question is how much you can borrow and what your likely repayments will be.

That’s where an AFG broker comes in. Your broker is there to do all the legwork for you. An AFG broker will be able to compare home loans across over 800 products available from Australia’s leading lending institutions.

And because you’re a first home buyer, you may be eligible for a first home buyer grant. This is a grant available to Australian citizens or permanent residents who wish to buy or build their first home, which will be their principal place of residence within 12 months of settlement.  As grant conditions vary from state to state, contact an AFG broker to find out how much grant money you could receive.

Spend a few moments checking out our clever online calculators, the latest industry news to keep two steps ahead, and explore our range of  home hints and tips. Then just get in touch with us by phone on 1300 130 987 or send an enquiry. We look forward to then walking you through your available options.

A general First Home Buyer FAQ guide

How much money can I borrow?

We’re all unique when it comes to our finances and borrowing needs. Get an idea of how much you could borrow and what your likely repayments would be with our online calculators. An AFG broker will then help determine the next steps on your road to owning your own home.

How do I choose the loan thats right for me?

Loan types and loan features will give you a good idea of the main options available, but because there are hundreds of different home loan products available, and individual circumstances are all different, contact us today to take a look at your options.

How much do I need for a deposit?

A deposit is usually between 5% – 10% of the value of a property, which you pay when signing a Contract of Sale. If you can’t organise a deposit in time, your conveyancer/solicitor may be able to arrange a deposit bond until settlement – although you’ll have to pay extra for this. If the deposit requested is 10%, your conveyancer may be able to negotiate this down to 5%.

How much will regular repayments be?

Go to our Repayment Calculator for an overall idea of what your likely repayments may be, but because there are so many different loans available, some with lower introductory rates, an AFG broker can help you navigate your options.

How often do I make home loan repayments – weekly, fortnightly or monthly?

Most lenders offer flexible repayment options to suit your pay cycle. Aim for weekly or fortnightly repayments, instead of monthly, as you will make more payments in a year, which will shave dollars and time off your loan.

What is the First Home Owner Grant and can I get one?

This is a grant available to Australian citizens or permanent residents who wish to buy or build their first home, which will be their principal place of residence within 12 months of settlement. As grant conditions vary from state to state, contact an AFG broker to find out how much grant money you could receive.

What fees/costs should I budget for?

There are a number of fees involved when buying a property. To avoid any surprises, the list below sets out all of the usual costs:

  • Stamp Duty – This is the big one. All other costs are relatively small by comparison. Stamp duty rates vary between state and territory governments and also depend on the value of the property you buy. You may also have to pay stamp duty on the mortgage itself. To find out your total Stamp Duty charge, visit our Stamp Duty Calculator.
  • Legal/conveyancing fees – Generally around $1,000 – $1500, these fees cover all the legal rigour around your property purchase, including title searches.
  • Building inspection – This should be carried out by a qualified expert, such as a structural engineer, before you purchase the property. Your Contract of Sale should be subject to the building inspection, so if there are any structural problems you have the option to withdraw from the purchase without any significant financial penalties. A building inspection and report can cost up to $1,000, depending on the size of the property. Your conveyancer will usually arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
  • Pest inspection – Also to be carried out before purchase to ensure the property is free of problems, such as white ants. Your Contract of Sale should be subject to the pest inspection, so if any unwanted crawlies are found you may have the option to withdraw from the purchase without any significant financial penalties. Allow up to $500 depending on the size of the property. Your real estate agent or conveyancer may arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
  • Lender costs – Most lenders charge establishment fees to help cover the costs of their own valuation as well as administration fees. Your AFG broker can let you know what your lender charges but allow about $600 to $800.
  • Moving costs – Don’t forget to factor in the cost of a removalist if you plan on using one.
  • Mortgage Insurance costs – If you borrow more than 80% of the purchase price of the property, you’ll also need to pay Lender Mortgage Insurance. You may also choose to take out Mortgage Protection Insurance. If you buy a strata title, regular strata fees are payable.
  • Ongoing costs – You will need to include council and water rates along with regular loan repayments. It is important to also take out building insurance and contents insurance. Your lender will probably require a minimum sum insured for the building to cover the loan, but make sure you actually take out enough building insurance to cover what it would cost if you had to rebuild. Likewise, make sure you have enough contents cover should you need to replace everything if the worst happens. AFG provides both home building and contents insurance.Speak with your AFG broker to obtain an estimate.

Need a home loan?

Whatever your circumstances, your AFG broker will find the deal that’s right for you, not the lender. We can arrange for a mortgage broker near you to get in touch.