Getting the keys for your first home is an exciting time, however it can be a challenging process to get there! From the paperwork through to the various loan options, to deciding on a variable or fixed interest rate, the first homebuyers’ market can be a daunting environment for a newcomer. However, it doesn’t have to be. Save time and money by following these 5 tips to ensure that your first experience as a homeowner lives up to the great Aussie dream.
Tip #1 There is a $10k start waiting for you!
Yes, that’s right! As a first home buyer you may be able to take advantage of the Government’s First Homeowner Grant (FHOG) if you are building or purchasing a property that has never been lived in (turn-key property). This is a government initiative to assist people in buying their first home. Visit WA’s First Homeowner Grant website for details.
Tip #2 You could avoid stamp duty
What is stamp duty? It is a state government levy on all transfers of real property (including houses, apartments and vacant land). It is levied on the value of the property and is a significant cost to purchasers. As a first homebuyer, you may be eligible for the first homeowner concessional rate of stamp duty.
Stamp duty is waived for first homebuyers on vacant land up to $300k and for a turn-key property up to $430,000. Stamp duty is calculated at a reduced rate for vacant land up to $400,000 and turn-key to $530,000. Purchases exceeding these thresholds will attract standard residential stamp duty. If you were to purchase a $400k property, most buyers would be liable for $13,015 in stamp duty – that’s quite a saving for a first home buyer! Visit the WA Department of Finance for more details.
Tip #3 Engaging an Expert
Meeting with a trusted mortgage broker early on in your search will help you understand what you can borrow, and therefore what you can spend. When you find the property you want, you are ready to secure the deal. Without a good understanding of your spending power up front, you may be looking at properties beyond your means. The sooner you engage an expert, the easier it will be to find a property that suits your budget and meets your expectations.
Tip #4 Get Pre-Approved, know all your costs!
There are many costs associated with buying a property to consider such as inspection reports, lenders mortgage insurance (LMI) and stamp duty to name a few. Getting a pre-approval for your finance puts you in an empowered position to take action. At this point you’ll know what grants and/or concessions are available to you and what costs you’re up for because you’ve engaged an expert to help you make informed decisions. Time to go shopping!
Tip #5 Stay on Target, stick to your budget
If you have followed tips 1 to 4, by this stage you are ready to launch into the property market to secure your first home. This is an exciting time and a positive move towards wealth creation. To ensure you stay on track and meet your loan obligations, make sure you stick to your budget. Make sure you find a property that ticks all your boxes for you that is within your borrowing power, ensuring you are well set to stay on track and meet your budget.
The first homeowners’ journey may seem daunting at first, however when you follow these simple tips you are guaranteed to make the great Aussie Dream a reality before you know it.
Most importantly, enjoy the journey!