First Home Owners

How much money can I borrow?

The amount you can borrow, commonly known as your borrowing capacity or borrowing power, will differ from lender to lender. Velocity Financial Services can give you a complete individual assessment of your situation when we meet.

How do I choose which home loan is best for me?

Velocity Financial Services uses some of the most sophisticated and cutting edge software as well as in-depth knowledge and experience to help you find which loan, of the hundreds offered by our panel of lenders, will best suit your needs.

How much do I need to save for a deposit?

The deposit required depends largely on the type of home loan and, of course, the lender you select. As a general rule, if you are an owner-occupier you will require 5% of the purchase price as a deposit. If you are an investor, you will ideally require10% of the purchase price, although it’s possible to purchase with less.

What is the First Home Owner Grant?

The First Home Owner Grant scheme offsets the effect of the GST on home ownership by providing a grant to first homeowners. It is a one-off payment of up to $7,000 to assist eligible first home owners with purchase or construction costs.

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

As a basic rule, you are eligible if you are an Australian citizen or permanent resident, buying or building your first home in Australia, with the intention of occupying it as your principle place of residence within 12 months of the settlement. It is important to note that if you are buying the property in conjunction with others, they must also meet the same criteria for the grant to be applicable.

How much money will I need to set aside for stamp duty?

Stamp duty is a state government tax based on a property’s selling price. Each state or territory has different rules and calculations; some offer discounts to first home buyers. Stamp duty can be a significant additional cost when buying property.

What other costs are involved in a home purchase?

As a rough guide, it is recommended that you budget 5-7% of the purchase price, on top of your deposit, to cover fees and charges. These fees and charges may include (but are not limited to):

• Building/pest inspection
• Valuation fees
• Lenders mortgage insurance (LMI)
• Solicitor fees
• Insurances
• Connection fees – phone/gas/electricity
• Rates
• Removalist fees

What is Lender’s Mortgage Insurance?

Lender’s Mortgage Insurance (LMI) does not protect the borrower should they be unable to make mortgage repayments. It protects the lender from any losses resulting in the sale of a property due to default by the borrower. LMI premiums are payable by the borrower when the amount borrowed is above a certain percentage, usually 80%, of the lender’s valuation of the property. Some lenders will allow you to add the LMI premium to your home loan; others require you to pay it up front.

What documentation will I need to apply for a home loan?

In conjunction with submitting your home loan application, you will need supporting documentation confirming your identity and substantiating your income. Documents can include:

• Driver’s license
• Birth certificate
• Recent pay slips
• Tax returns
• Bank statements

Velocity Financial Services will be able to provide an accurate overview of what’s required for your individual situation.

How often can I make mortgage payments?

Most lenders these days offer flexible regular repayment plans. You can choose to pay weekly, fortnightly or monthly. Repayment can therefore be matched to your pay cycle.

To find out more, please get in touch.