• Buying your first home can be exciting and overwhelming at the same time – after all, it’s likely to be the biggest investment you’ll ever make, and there are a lot of decisions to make!
• This is our expert brokers U Financials comes in. From the types of home loans available, how much you may be able to borrow and the repayment amounts, we’re here to help you better understand the loan process and your home loan options.

The First Home Owner Grant (FHOG) was introduced by the Australian Government to help Australian’s with their first home purchase. The Grant is available across Australia, at a base amount of $7,000, although the total grant amount and legislation varies for each state.
You can find more information about the FHOG in your state using the links here. - Victoria FHOG

How do I know if I am eligible for the First Home Owner Grant?

If you meet the following criteria, you may be eligible to apply for the First Home Owners Grant:

• Will this be the first time you have owned or built a house in Australia?
• Do you intend to live in the property for at least 6 months consecutively, within 12 months of purchase?
• Is the total property purchase less than your state’s stipulated capped amount?

Are the rules different for newly built vs. pre-existing properties

The base amount will be $7,000, however, extra incentives may be offered in some states and territories if you are building your first home.

What is the purchase value cap for my property?

• VIC – $750,000

You can use the First Home Owners Grant (FHOG) as a deposit. However, it isn't normally enough on its own. ... If you're building a home then your grant isn't available until construction commences. In total, you'll typically need 5% to 10% of the purchase price, including the FHOG. See below table for a rough estimate of deposit needed.

The size of deposit you could save to buy your first home makes a big difference to the interest rate and the other costs you potentially pay on your home loan.

The deposit you save has much more impact than just timing your entry into the property market. Waiting to save a deposit of 20% or more achieves two possible wins:

• The bank may give you a better interest rate because you represent a lower investment risk for them.
• You can avoid paying Lender’s Mortgage Insurance (LMI) because your loan-to-value ratio (LVR) is 80% or less.

The deposit you can raise will impact the interest rate offered to you by the bank. The bigger your deposit, the more you can negotiate your own interest rate and choose the lender you really want – while other lenders do not negotiate at all.

Some examples of costs and deposit estimates as below:

Owning your own home is a great dream. But don't be fooled. It will require you to make some major sacrifices and finding a home requires discipline and effort, not to mention cash. But with some determination, you can get on the road to buying a home of your dreams.

Purchasing Process

So you've found your property, what's next? We explain how the purchasing process works. - It’s a great feeling when you find your perfect property match. But maybe you’re not sure what follows from here. The purchasing process is actually quite straightforward when you know what’s involved.

Cooling off period - If you have purchased your first home through private treaty (that is, you’ve made an offer to the owner and it’s been accepted), rather than at auction, you may get a cooling-off period after the contract is exchanged. During this period you can cancel the contract though there may be a penalty, which can be around 0.25% of the purchase price. The number of days in a cooling off period varies from state to state but your mortgage broker and conveyancer can explain what will apply to your situation. Buying at auction is very different as there is usually no cooling off period. If you are the highest bidder when the hammer falls, you are generally obliged to go ahead with the purchase.

Exchange to settlement process - “Exchange” is the first step to buying a home, and it refers to when the buyer and seller each sign a copy of the contract of sale, then swap their copies over so that everyone has a signed contract. Neither you nor the seller is legally bound to go ahead with the sale until a written, signed contract is exchanged. So this is an important moment. The time of exchange is also when you need to pay a deposit. Once contracts are exchanged, it usually takes six weeks until “settlement”. This is when the sale is finalised and you can move into your new home. Your mortgage broker will be busy at this stage, liaising with your lender to ensure your home loan is ready to go on settlement date.

Purchase price vs bank valuation - As part of the loan approval process, your lender will likely want to value the property. It’s not necessary for you to do anything at this stage. Your lender will organise its own bank valuation to be sure they don’t loan you more than your property’s worth. The lender may not disclose what the bank valuation came to, and it could be different to the purchase price anyway because lenders tend to take a conservative estimate. The main point is that the bank needs to be comfortable that the loan doesn’t exceed your home’s value.

Help finding a property: - If you need help finding the right property, we can offer a solution. We work on your behalf to find a home that meets your needs and then negotiate with the seller to help you secure a good price. We may be able to help you save time and money.

The purchase process takes you one step closer to your own home, and rest assured, we will be by your side keeping you up to date on how things are progressing.

TBA

In Victoria, stamp duty is often the biggest cost you’ll need to pay when buying a home, outside of the home itself, and it needs to be paid upfront. But exactly how much will you be up for? And are you entitled to a discount or exemption?

How stamp duty is calculated in Victoria?
Stamp duty, or land transfer duty as it’s often known in Victoria, is calculated on the “dutiable value” of your property. This is simply the purchase price or the property’s value on the open market, whichever is greatest.

As with income tax, stamp duty is not a set percentage or flat fee but is calculated according to a sliding scale. The standard rates are set out below:

The stamp duty exemption and first home buyers - If you’re a first home buyer, the standard stamp duty rates may also not apply.

• First home buyers who purchase a home after 1 July 2017 don’t have to pay any stamp duty at all if the property they’re purchasing is valued at $600,000 or less. That represents a saving of up to $31,070.
• First home buyers who purchase a property valued between $600,001 and $750,000 are also entitled to a stamp duty concession. As with stamp duty itself, this is based on a sliding scale. The closer your purchase price is to $600,001, the greater the concession.
• First home buyers purchasing a property valued at more than $750,000 receive no stamp duty relief under this scheme.
• The important date for this exemption or concession is the date the contract for sale was signed. If you signed a contract to purchase your first home before 1 July 2017, you won’t be entitled to the same discounts and exemptions. However, you may still be entitled to a 50% duty reduction if the property has a dutiable value of less than $600,000 or the contract price was less than $750,000.

For any of these discounts, you must also be eligible for the First Home Owner Grant (FHOG).