[19-Feb-2022 23:15:38 UTC] PHP Fatal error: Call to undefined function add_action() in /home/luxefin/public_html/wp-content/plugins/js_composer/include/autoload/vendors/cf7.php on line 8 [19-Feb-2022 23:15:42 UTC] PHP Fatal error: Call to undefined function add_action() in /home/luxefin/public_html/wp-content/plugins/js_composer/include/autoload/vendors/cf7.php on line 8 [20-Feb-2022 05:53:27 UTC] PHP Fatal error: Call to undefined function add_action() in /home/luxefin/public_html/wp-content/plugins/js_composer/include/autoload/vendors/woocommerce.php on line 19 [20-Feb-2022 17:07:15 UTC] PHP Fatal error: Call to undefined function add_action() in /home/luxefin/public_html/wp-content/plugins/js_composer/include/autoload/vc-pages/settings-tabs.php on line 27 4 FIRST HOME BUYER MYTHS EXPOSED - Luxe FinancialLuxe Financial

Buying your first home is an exciting time but it can also be quite stressful and frustrating when you’re searching for the perfect place at an affordable price or struggling to obtain finance to buy a home you’ve fallen in love with. Here are some of the common misconceptions first time buyers can have:

  1.  Parental guarantee loans no longer exist

Not true! A guarantor loan allows you to borrow up to 105% of the property price and avoid Lenders Mortgage Insurance and can be used to buy a home or investment property. Most banks and lenders accept a guarantee from your parents, but it is also possible to have it from a spouse, sibling, or grandparent.

A guarantor is essentially a parent or family member who provides a guarantee on your mortgage, by using their property as security. Once you have paid off part of your loan or your property has increased in value then you can apply to remove the guarantor.

  1. You need a 20% deposit to buy your first home

The size of the deposit you need to contribute to a property purchase is actually dependent on what type of property you are looking to buy, the location and your current income and expenses.

Depending on which lender and product suit your circumstances, there are lenders out there who will lend up to 90% of the purchase price, or even 95%.

  1. It’s cheaper to rent

There are many variables to take into consideration: rental price, expenses, purchase price, stamp duty and other transaction costs, property location, the expected mortgage interest rate, how much it costs to run and renovate the property, expected capital gains – the list goes on!

However with interest rates at record lows, and some great purchasing opportunities in certain areas, it might be a good time to do a little research so you can make an informed decision. If you’re not quite ready to purchase now, Luxe Financial also provides assistance with budgeting and savings strategies, so we can help you get a plan in place to achieve your goals.

Also many first home buyers think they need to pay off all other expenses and debts before they can apply for a home loan. Although these will affect the amount you are able to borrow, you can still secure a home loan if you have an existing student debt or a car loan. It is possible to consolidate some minor debts into your home loan and potentially save money.

Lenders look at your whole financial situation – your income, your expenses and other debts, the valuation of the property you are wishing to buy, and the percentage of that value you are hoping to borrow from them – before they determine your suitability to pay off the loan.

  1. The First Home Owners Grant is no longer available

The First Home Owners Grant (FHOG) scheme is a national scheme funded by the Federal Government, but administered through each state or territory Revenue Office. Whilst the FHOG is no longer available when purchasing established property, it is still available for new homes with amounts ranging from $5,000 up to $25,000. As well as the FHOG, many states offer additional incentives for first home buyers such as stamp duty concessions. Wollongong, Illawarra and Sydney buyers check out the details for NSW property purchases here

Getting your first home loan can be daunting. But you don’t have to go it alone. Your Finance Broker can give you expert advice and guidance at every step. A Luxe Finance Broker will:

  1. Gain a thorough understanding of your circumstances, needs and goals.
  2. Based on your individual situation, compare a range of loan products from our choice of 30+ lenders to find the right home loan for you.
  3. Calculate how much you can borrow and your likely monthly repayments so you know the price range you can afford to buy in.
  4. Calculate the deposit required and explain Lenders Mortgage Insurance (LMI).
  5. Explain the home buying process from start to finish.
  6. Explain all the costs associated with a loan.
  7. Prepare the paperwork, lodge the application and take care of all the running around.
  8. Help you complete and lodge an application for the First Home Owners Grant (if applicable).
  9. Liaise with your lender and follow up until final approval is received.
  10. Advise you on the information and documentation your solicitor or conveyancer needs to provide to complete the transaction.

Click here and “Request a Call Back” from an expert Mortgage Broker who will contact you and work out what homes loans are right for you!

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