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Buying your first home can be one of the most exhilarating experiences of your life and for the vast majority it is also the biggest financial commitment that you will ever make. Without someone to guide you through the process it can go from exhilaration to despair.

Don’t go it alone, but rather engage the services of a professional Finance Broker to help your dream become a reality, with as little fuss as possible. It’s true that you cannot avoid some obstacles along your journey of first home ownership but it is definitely possible to mitigate many of them if you have the right broker in your corner.

Some common questions and considerations by first home buyers are;

1.   Do I buy established or do I build?

The obvious advantage if you buy an established property is that you know what you are getting, on the surface anyway. If you build then you have more control over the finished product plus you have a “fresh” house or a blank canvas to create your living space from.

2.   Do I need to get a pre-approval for finance?

Whilst not mandatory it is highly recommended that you have spoken with a professional Finance Broker to have your situation and lending capacity verified. It is possible to submit an application to the bank and get a pre-approval in writing that is valid for 90 days and can be converted to a full approval once a property is found, providing your financial situation has not changed. Proof of income will be requested once the pre-approval converts to a formal approval so it is advisable that you don’t leave your job or take on more debt for example in the middle of your property search.

imgres3.   What grants are available to me?

Most are aware of the “First Home Owners Grant” or FHOG as it is sometimes referred to. Many are unaware that if you purchase a property as a first home buyer for under $400,000 then you are entitled to another grant worth $2,000 that is paid into your bank account after settlement. Make sure your broker is aware of this and also organises all the paperwork (or you won’t get it) for you as this money will come in very handy once you have moves into the property. 70% of FHOG applications are returned, thus causing delays because if incorrectly completed application forms.

4.   What do I need to put on the contract of sale also called the offer & acceptance?

I must make it clear I am not a solicitor or conveyancer so if in doubt  you need to seek professional guidance but there are certain conditions that are highly recommended when it comes to buying an established house or block of land.

You definitely want to complete the finance clause stipulating a minimum of 21 days to arrange finance approval. Also a pest inspection on an established property is a must and a building inspection is also highly recommended to ensure the building is structurally sound. You can go as far as having the electrics and plumbing inspected by a licensed tradesperson, especially if you are buying a property that is aged. If you are building it may also be wise to have a reputable building inspector carry out inspections at each progress payment (usually 4-5) to ensure the builder and tradesman has not cut any corners during the construction phases.

5.   What other costs are involved in buying my first home?

If you are buying an established house you will need to allow a sum of money for settlement costs that will include solicitors/conveyancers fees as well as the balance of council rates and water rates. If you are building then it is important to factor in how much funds you will need to complete the property, inside and outside once you have moved in. Stamp duty concessions are available up to $500,000 and are completely phased out once you hit $600,000 so if you are planning on spending over $600,000 this will have to be factored into the budget.

6.   Can I rent the property out and still get the FHOG.

To be eligible for the FHOG you need to occupy the property for at least six months within the first twelve months of purchasing the property or you will not be eligible for the grant. A certain low deposit lender also requires that you receive written permission to rent your property out and this is only granted on a case by case basis. It is always best to check with your lender and the office of state revenue before you rent your property on the open market to ensure you are not penalised in any way.