6 Top Tips To Buying Your First Home
Buying your first property is both exciting and daunting. Here are some tips from people who have been through the journey
- Know the true cost of property – Knowing the maximum you are willing to spend on a house or apartment is one thing, understanding the true cost of the property is another. Make sure you take into account stamp duty, mortgage insurance, loan application fees and legal costs.
- Take advantage of government incentives – Check out the varying State Government incentives, including the First Home Owner Grant and stamp duty concessions, and the Federal Government’s First Home Saver Account scheme.
Clients are often unaware of the full extent of the incentives available to them to save for a deposit and then to buy their first home. The rules are constantly changing and vary from state to state.
One incentive that is uniform across all states and has stayed stable since being launched in 2008 is the First Home Saver Account scheme operated by the Federal Government. Under the scheme, the government contributes up to $1,020 per year (equivalent to 17% of the first $6,000 your clients contribute per year), provided conditions are met. Plus the interest earned on the account is only taxed at 15% and clients don’t pay any tax when they withdraw the money to pay their deposit.
The state-based first home owner grant and stamp duty concessions are far less stable and consistent.
For example, the New South Wales Government announced in its June state budget this year that it will abolish its current first home owner grant scheme on 30 September 2012. In its place comes the First Home Owner Grant (New Home) scheme which offers a first home grant of $15,000 for buyers of new property up to $650,000 in value. First home buyers of existing homes will not be eligible for a grant.
All other states are continuing with their existing $7,000 grants on new and existing homes for the foreseeable future, with varying maximum values of property eligible.
Even more generous is the exemptions and discounts on stamp duty in some states. In some cases, this could save you more than $20,000. However, the exemptions and concessions vary markedly between states
- Get your cash flow under control – Set yourself a savings goal and then a budget that will get you there. Make sure before you borrow that you have demonstrated (if only to yourself) the discipline to make the mortgage payments.
- Select a home loan that is right for you – don’t just select the lowest interest rate; think about the right mix of variable and fixed rate loan, flexibility with your loan period and whether you need a redraw facility.
- Get advice – Contact the Taurus Team. Our In House Solicitor, Sarah hatch is available to vet the sales contract, assist you with the purchase process and settlement of the property. Our Mortgage Brokering Company, Taurus Mortgage Services Pty Ltd will assist you to obtain a pre approval home loan facility in advance of your home purchase to ensure that you know in advance exactly what you can afford, what deposit will be required and what your repayments will be. We will provide you with a competitive and appropriately tailored home loan to meet your requirements.
- Review insurances. Before you settle on your mortgage, it is important to review your life, TPD, income protection and trauma cover to make sure it is adequate to cover mortgage payments
If you require legal services please call Sarah Hatch on (02) 9411-4161 or email sarah@taurusfinancial.com.au
Gordon Hatch is available on (02) 9411 4161 or email gordon@taurusfinancial.com.au for Mortgage Services and a free no obligation Mortgage Assessment.
Securitor Financial Group Limited is not responsible for advice provided by Gordon Hatch/Taurus Mortgage Services Pty Ltd and by Solicitor Sarah Hatch of Hatch & Associates Pty Ltd.