Congratulations - you’re about to take one of the most exciting steps in your life. Embarking on the home-buying process for the first time can be a huge learning curve, but it’s well worth the effort. Setting up your financial future, owning your own land and not answering to anyone else’s house rules - it’s no wonder owning your own home is still a major life goal for most people.
Speak with a home loan consultant today to discuss your options.
What to expect.
Before you get into serious discussions or financial planning, it’s worth simply getting accustomed to how the process works and even what some of the terms mean. If you’re starting from scratch, you might feel like your banker, broker and even your parents or home-owning friends are talking a different language. You’ll be coming across terms like ‘principal’, ‘comparison rate’, ‘conveyancing’ and ‘equity’ a lot so it’s worth getting to know them well - and sounding more confident to your bank will also be a point in your favour.
Getting financially ready.
One of the first steps is to sit down with your finances and work out if you're ready to take on a home loan. Conduct a thorough audit of your income and costs over a standard year, as well as your current debt which includes vehicle loans, credit cards, personal loans and HECS. Think about how your income might change over time - are you aiming to step up in your industry or remain at a similar level for the time being? If you’re in the ADF, what do your next moves look like: are you likely to rank up in the next couple of years, or considering going on deployment?
Before approaching a lender, you need to have demonstrated at least three months of consistent saving or paying rent to prove you’re up to the responsibility of a loan. Banks can now also take into consideration your spending habits, so it’s worth keeping eating out and other discretionary spending in line in the months leading up to buying a property.
Once you’ve collated your financials, it’s time to calculate your borrowing power: input your income, costs and debts into our easy online calculator to see the kind of figure a bank is likely willing to lend you, as well as the monthly repayments - giving you a better idea of the budget and location you should be aiming for. Try plugging in different interest rates as well to see how the monthly repayments change - over a 30 year term, rates can shift a lot and could mean a few hundred extra dollars per month.
Find your perfect loan match.
The first time you start looking into home loan options can certainly be overwhelming. Different loans are designed for different types of people, in different financial positions, at different life stages - so there will be one that suits wherever you’re at. From a no-frills loan with a low rate to one that offers greater flexibility, with our range of options there’ll be something for you. If you’re in the ADF, talk to us about the Defence Home Ownership Assistance Scheme (DHOAS) which gives serving members a boost to owning their own home sooner.
As a first home buyer, there are assistance programs from federal and state governments that can give you a helping hand. However, even if you qualify for every single one, you’ll still need to provide significant initial investment. For the First Home Guarantee, for example, where you only need to provide a 5% deposit, with the median house price in Australia being over $800k, that deposit is still $40,000 - so it’s still necessary to invest in your savings in the lead up to a house hunt.
You can take steps towards this goal in a number of ways:
The costs with buying a house add up to more than what the auctioneer shouts out as the gavel comes down.
As a first home buyer, make sure to check your eligibility for various home buying schemes or programs that can give you a leg up during the purchasing process or over the life of your loan.
Getting pre-approval before you start your house hunt in earnest means getting the paperwork for your loan approved, completed and out of the way. As soon as you find the right home, you’ll be ready to go straight away with a fixed maximum you can borrow.
Showing pre-approval to buyers can also give you an edge in the market as it means less waiting around on their end - it’s a win-win.
You can buy a new or used car or motorcycle up to, and including, 5 years old with a car loan. If you would like to purchase an older car, contact us as you may do so with a personal loan.
You need to have at least 5% genuine savings plus enough funds to cover fees and charges.
Where you have less than a 20% deposit, lenders mortgage insurance (LMI) or, if you are eligible, a Home Guarantee Scheme will be required. Speak to a lender to find out more.
The Defence Home Ownership Assistance Scheme (DHOAS) assists current and former Australian Defence Force (ADF) members and their families to achieve homeownership.
DHOAS is administered by the Department of Veterans' Affairs (DVA) on behalf of the Department of Defence.
DHOAS provides eligible current and former serving members of the Permanent Force and the Reserves with a subsidy on the interest of their home loans.
The subsidy is paid monthly, directly into a DHOAS home loan. The amount of subsidy you receive depends on your subsidy tier level and the balance of your home loan up to your subsidised loan limit.
To learn more about Defence Bank DHOAS home loans click here.
To find out more about DHOAS and your eligibility click here.
