Our team here at Sage are well-versed in supporting first home buyers on their journey, so you’ve come to the right place. Read on to learn more about for your crash course in buying your first home in Queensland.
If you’re planning on financing your home through a bank or financial institution, you’ll traditionally need a 20% deposit if you want to avoid paying Lenders Mortgage Insurance (LMI). However, there are lower deposit options like the First Home Guarantee Scheme, which only requires a 5% deposit. The scheme has eligibility criteria and is available depending on the availabilities within the financial year, so it’s a good idea to chat with your mortgage broker or financial advisor to see if it’s suitable for your situation.
The first step to saving is spotting opportunities to cut back. Start by reviewing your bank statements and categorising your expenses—essentials like groceries and bills versus non-essentials like takeout or impulse buys. This quick exercise will give you a clear picture of where your money is going and help you pinpoint areas where small changes can lead to big savings.. Tedious, but revealing! Now circle every item where you can make cuts. Do you need three streaming services? How often do you really go to the gym? Small changes like these could add up to over $1,200 a year towards your deposit!
Credit card and Afterpay debts can negatively impact your mortgage application, just like a poor credit score. Use your new savings to clear these debts as quickly as possible. Once they are gone, make your savings work harder for you by placing them in a high-interest savings account or term deposit.
To avoid mortgage stress in the future, work backward from how much you can comfortably afford in mortgage repayments each monthTo avoid potential financial stress later, start by working out how much you can comfortably afford in monthly mortgage repayments, and use this as a guide to determine your price range. We recommend speaking to a mortgage broker who can help you calculate how much you can borrow and understand how much you’ll need to keep aside for stamp duty and other fees associated with purchasing your first property.
Once you’ve determined how much you can borrow, the next question is how you want to borrow it. The choice can feel overwhelming. Do you want a variable rate, fixed rate, or a mixture of both? Will you be repaying interest and principal, or interest only? Do you want the ability to offset your savings against your home loan? Or do you want a split loan that lets you mix and match features? A financial advisor or mortgage broker can help you work out the pros and cons of each loan product and find the best option for you.
The government wants to see you get into your own home., almost as much as you do. Here in Queensland, there are a range of state and federal government grants available for first-home buyers:
To help you get first-home ready, we’ve put together a helpful first home buyer finance guide, download our eBook here.