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June 26, 2017

First Home Owners - Finance (Part 2)

Saving for your first home can take time. It really can be an emotional roller coaster for some people, epically when there’s more than just yourself you have to take care of. Following from my last blog about First Home Owners and the buying process, I grilled two professionals about the financial side of the process. Natalie Gesler one of the owners of @ Real Estate Yeppoon and also Shane Nipperess, the owner of Centrepoint Finance Yeppoon. They both went into detail about finance. 

I find that The First Home Owners grant would be a helpful resource to consider when saving for a property. I asked Natalie about the First Home Owners grant and who is eligible for the bonus. She went on to inform me that in Queensland the grant has been boosted to $20,000 but only till the 30th of June 2017 so best be quick to apply.

  • You must be an Australian Citizen or Permanent Resident (or applying with someone who is).
  • You or your Spouse must not have previously owned property in Australia.
  • You mist be at least 18 years of age
  • You must be Buying or Building a brand-new home, valued under $750,000.

If you meet all the requirements above, how do you go about applying? Natalie answered “Your Lender will generally arrange your first home owner application for you”.

I have included the link for more information about the grant below.  

https://firsthomeowners.initiatives.qld.gov.au/

However, what if you were looking for an established home? Are you entitled to any incentives? Natalie explains “If you purchase a home valued under $550 000, you may be eligible for the first home owner connection, where your transfer duty may be waved”. Personally, I find that unfair mainly because a large amount of first home buyers cannot afford to purchase a property fitting the above characteristics.

For more information check the website below
https://www.qld.gov.au/housing/buying-owning-home/first-home-concession/ 

Continuing from my last live interview with Natalie, I asked one of Yeppoon’s finance professional Shane Nipperess from Centrepoint Finance Yeppoon to explain the more financial side of buying a property.

Starting off strong I asked Shane, “How can I maximise the amount of money I can borrow?” Shane started off simple “It comes down to how much you earn and offset that against any debt you may have”. For example, Credit Card, Personal or Car loans etc. “So the best way to borrow the most amount of money is to have little to no debt” Shane explains. 

Moving forward I queried Shane on if he has any tips he could suggest / recommend to first home owners about what they can do to make sure their appointed lender would approve the house loan. “The best tip I could give is that if you’ve got any existing loans that they are well conducted, so you’ve made all your payments before the due date, no late payments on your credit card etc. Show the lender for at least three moth before you apply for the loan that you can save an equivalent amount every week / fortnight out of your pay as to what the loan repayments may be”. This will show your lender that you can afford the payments for the property you may be looking at purchasing. 

I then went on to ask Shane a more controversial questions. What is the difference between a Mortgage Broker and a Bank Lender? “I’m probably a bit biased here” Shane starts off with a chuckle (Shane is a Mortgage broker) If you go to a bank, they can only offer you their products, but if you came to a mortgage broker, we’ve got probably 20 – 30 home loan lenders that we deal with.” Therefore, mortgage brokers can offer you a variety of different home loans and can possible get you a better deal from a different lender then the bank of your choice. 

So, you’ve found the house you would like to purchase and you’re ready to make an offer. You’re going to need a deposit. But how much deposit are you going to need? I asked Shane, “The minimum deposit you need to purchase a house is 5%. However, you will also need to cover any Stamp Duty, Government Costs, Legal Work (Solicitor) and Bank Establishment Fees. Also if you have less then 20% deposit you will need to pay mortgage insurance, which could add up to another $12 000 to $14 000 Thousand”

What is a Guarantor? “A Guarantor is usually a family member that has got sufficient equity in their property that they’re prepared to basically lend it to you so you avoid paying mortgage insurance, you are still paying it back”. If you are a first home owner, do you need to have a Guarantor to purchase a property? If first home owners do need a Guarantor, why? “As long as you have your deposit and can afford the associated costs, you wont need a Guarantor” Shane explains.

Finally, I asked Shane if he has any last tips for first home owners to use when purchasing a property,

“I would suggest you go talk to a broker before you continue or start your shopping, so that you can find out what it is you need to be able to get a home loan and whether you are eligible and how much you can afford to borrow because you don’t want to spend your time finding your dream home and then try to get the loan and not be approved” which would be an absolute let down.


If you would like to view both interviews, please follow the links below to our Facebook page. Like us whilst you’re there to keep up to date with all things property and the current property market.

 

Interview 1 with Natalie Gesler – https://www.facebook.com/atrealestateyeppoon/videos/1913478058916445/ 
Interview 2 with Shane Nipperess - https://www.facebook.com/atrealestateyeppoon/videos/1918313558432895/
If you would like to get in contact with Shane follow this link to his website, or visit his office Centrepoint Finance at 34 Normanby Street, Yeppoon - http://yeppoon.centrepointfinance.com.au/

By Emma Parry
@ Real Estate Yeppoon