Building your first home unlocks a whole new world of terminologies, concepts and understandings. It can be an overwhelming process without the right guidance, and there will be plenty of questions that pop up along the way. Below, we’ve compiled a list of the most frequently asked questions among Queensland First Home Buyers.
What Government Grants am I eligible for?
First Home Owners’ Grant
The Queensland First Home Owners’ Grant is a state government initiative introduced in 2000 to help first home owners move into their first home sooner. First home buyers who choose to buy or build a house, unit or townhouse valued at less than $750,000 are eligible to receive the $15,000 grant. In order to keep the grant, all applicants must move into the home within 1 year of completion and live in the home continuously for 6 months. To find out if you’re eligible for the First Home Owners’ Grant and to apply click here.
New Home Guarantee
After the success of the First Home Loan Deposit Scheme, the new 2021-22 Federal Budget temporarily expands the Scheme by allowing an extra 10,000 New Home Guarantees in 2021-22. This will be made available from 1 July 2021 - 30 June 2022 and allows more first home buyers to build or buy a newly built home and enter the housing market with a deposit of as little as 5 percent.
First Home Super Saver Scheme
If you’re an eligible first home buyer, the new First Home Super Saver Scheme allows you to release up to $50,000 in eligible superannuation contributions to use as a deposit for your first home from 1 July 2022. This incentive is beneficial to assist you with the purchase of your first home.
Family Home Guarantee
In the 2021-22 Federal Budget, the Government established a new program called the Family Home Guarantee, which aids eligible single parents with dependents the assistance to build a new home, or purchase an existing home with a deposit of as little as 2 percent. As of 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years.
This initiative is aimed at single parents with dependents, regardless of whether that single parent is a first home buyer or previous owner-occupier. For the full terms and conditions and to check eligibility, we advise you to visit the Australian Government website.
How much do I need to save for my deposit?
Generally, a deposit of 5 - 10% of a property’s purchase price is an ideal amount to save for a deposit. However, the more money you save for a deposit, the more likely your chance will be for getting your home loan approved.
If you’re eligible for the Family Home Guarantee, you may be able to save for a deposit of as little as 2 percent.
What can I do to improve my credit score?
Have a Credit Card
Unfortunately, not having a credit card does not make you more creditworthy. In fact, having a credit card and using it responsibly as well as paying it off on time is evidence that you can manage your debt.
Don’t Miss Bill Payments
Missing your bill payments such as phone bills, mobile and internet on a regular basis may demonstrate that you aren’t reliable. Further to this, if you don’t make timely payments to these kinds of services, your credit provider might refer your debt to a debt collector or report your debt to a credit reporting agency. Both of these situations are not ideal as it leaves a negative mark against your credit score.
Pay Off Your Debts
If you have a loan, whether it be a car loan or a personal one, it’s a good idea to pay these off quickly and consistently to prove that you are able to successfully manage your debts. This will help to increase your credit score.
How much money can I borrow?
The answer to this question varies from each person as it heavily depends on your current financial situation. To get a good estimate of how much you may be able to borrow, check out your bank’s website for a home loan borrowing calculator. This will generally ask you for how many people the loan is for, whether you have any dependants, what your income is, what your bills and living expenses are and whether you have any other loan repayments you’re making. Alternatively, you can book an appointment to talk to a lending specialist who will be able to give you a more accurate estimate of how much money you can borrow.
Do I really need a mortgage broker?
Going through a mortgage broker is entirely up to you and is usually dependent on your financial knowledge and how confident you are in navigating the property market. One of the benefits of having a mortgage broker is that they do all the legwork. This means that they take care of all the paperwork, sourcing your pre-approval and helping you to apply for any government grants you may be eligible for. Mortgage brokers will also compare various bank loans so that you can explore the best options for your and your family. Their experience and expert advice makes them a handy tool to have, especially when it comes to knowing what your borrowing power really is.
If we didn’t answer your question, please feel free to head to our website for more information or visit your nearest display centre and chat to one of our knowledgeable consultants who will be able to answer all of your questions!