News

Buying your first home will be one of the biggest purchases a person ever makes, and there’s a whole lot to get your head around. But before you can even begin to start searching for your dream home, and start mentally planning your design scheme or renovation touches, you need to save a deposit.Zango chatted to mortgage broker Gary Rock from <a href="https://www.nectarmortgages.com.au/region/act/" rel="nofollow" target="_blank">Nectar Mortgages</a> to find out everything you need to know about saving for your first home, and starting the hunt for a mortgage.<h4 data-block-key="14ht0">How much should you save?</h4>Figuring out how much you need to save comes down to how much the purchase price of your property will be. Generally speaking, at a bare minimum you need to save 5% of the purchase price for your deposit, plus enough money to cover extra costs like stamp duty, solicitor fees and bank fees.If you save less than 20% as your deposit, a financial institution may charge you Lenders Mortgage Insurance (LMI), which is an insurance policy to protect them in the case you can’t service your mortgage. LMI is a percentage of your total loan, and varies depending on a range of factors.While LMI can be costly, the time it would take you to save 20% can also be costly, so Gary says you need to weigh up your options.“Let&#x27;s say you&#x27;ve got a 5% deposit saved plus money to cover costs, but someone told you you should wait to save 20% so you don&#x27;t have to pay mortgage insurance,” he says.“To that I would say, if you&#x27;re buying a $500,000 property, your mortgage insurance is about $12,000. How long until you are able to save 20 per cent? If it will take another two years, I’d ask what you thought the $500,000 property would cost in two years time, plus how much you will have outlaid on rent during that period.”<h4 data-block-key="9tufq">Discounts for buying your first home</h4>The good news for first home buyers is there is some help out there to help you get in your own home sooner.The First Home Loan Deposit Scheme is an Australian Government initiative allowing eligible first home buyers to buy a home with as little as a 5% deposit without having to pay LMI. Certain time limits and eligibility criteria apply - <a href="https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/first-home-loan-deposit-scheme/" rel="nofollow" target="_blank">click here to find out if you may qualify</a>.Both the ACT and NSW Governments also offer subsidies to first home buyers. In the ACT, <a href="https://www.revenue.act.gov.au/home-buyer-assistance/home-buyer-concession-scheme/home-buyer-concessions-from-1-July-2019" rel="nofollow" target="_blank">home buyer concessions</a> allow first home buyers to pay no or reduced stamp duty, depending on your purchase price. In NSW, the First Home Buyer Assistance Scheme also <a href="https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/assistance-scheme" rel="nofollow" target="_blank">allows first home buyers to pay no or reduced stamp duty</a>, while the First Home Owner Grant of $10,000 is available for first home buyers who are either<a href="https://www.revenue.nsw.gov.au/grants-schemes/first-home-buyer/new-homes" rel="nofollow" target="_blank">building a new home or a substantially renovated home</a>.<h4 data-block-key="w8cbi">Should you use a broker?</h4>Once you’ve got your deposit sorted, it’s time to start shopping around for a home loan. You can either go to a financial institution directly, or engage a mortgage broker, who is someone who will search the market and find the best mortgage options for you.<h4 data-block-key="bq73g">So what’s the difference?</h4>“The main benefit of using a broker is we’re covered by the best interest duty laws. So we must shop around for the best product that best suits the client&#x27;s needs, whereas a bank doesn&#x27;t need to do that. They&#x27;re just going to sell whatever product they&#x27;ve got. So going through a broker, we will make sure that the client&#x27;s interests are before the banks,” says Gary.<img alt="Gary_Rock_800px_532px.png" class="richtext-image full-width" height="532" src="https://d2t3vhau9g43uy.cloudfront.net/media/images/Gary_Rock_800px_532px.width-800.png" width="800">“And we don’t just give clients advice on the home loan itself. But we also give them the information, like how to buy, what an auction is, the difference between auction and private treaty, or what are some techniques you can use at auction. All these types of things where a branch lender would normally not touch on them. But that does come down to personal broker, so find one who will help you.”In terms of pricing, Gary says it generally costs the same to get your mortgage through a broker or directly through a financial institution.“Most brokers in Canberra do not charge a brokerage fee, but there are brokers that do, so I suggest that people shop around and find a broker that doesn&#x27;t charge that fee. If they don&#x27;t charge the brokerage fee, then the costs are the same,” says Gary.Gary also says that if a bank is offering incentives, such as cash backs or refinance offers, you will most likely be able to also access these through a broker. Sometimes there will be incentives that only a bank will offer directly, but sometimes there will be incentives you can only access through a broker, not the branch.<h4 data-block-key="4rtor">How to save your deposit</h4>Now time for the hard bit—saving your deposit. How much you are able to save will depend on your own finances, but it can help to have a budget in place and set goals so you know what you’re aiming for.When it comes time for a financial institution to decide whether to loan you money or not—and how much to lend you—they’ll look at a combination of factors. One of the big ones is genuine savings.“Especially for a first time buyer, the banks are looking for their ability to meet their day-to-day expenses, and put money aside, which would be what&#x27;s going into the new home loan,” says Gary.“So make sure you’re putting the money into an account in your own name. Don&#x27;t save in Dad or Mum&#x27;s account or save in an offshore account or anything like that. Some banks will also accept rent as a proof that you can afford to pay a mortgage, so having a tenancy in your name does help. They just want to see that you can control your own money.”Like with anything, everyone’s circumstances are different, so make sure you hunt around and ask questions to ensure you’re taking the right course of action for your own personal circumstances.Looking for your first home loan? Contact the <a href="https://www.nectarmortgages.com.au/region/act/" rel="nofollow" target="_blank">friendly brokers at Nectar Mortgages</a> who can help answer your questions, and find the best home loan for you.

Saving for your first home? Here’s what you need to know

This two-bedroom townhouse just minutes from the local shops in Mawson is the perfect foot-in-the-door to Canberra’s hot property market.The open plan home at <a href="https://zango.com.au/sale/1-86-mawson-drive-mawson-act-2607-45457/" rel="nofollow" target="_blank">1/86 Mawson Drive, Mawson</a> is listed with <a href="https://zango.com.au/agents/michael-martin/" rel="nofollow" target="_blank">Michael Martin</a> and <a href="https://zango.com.au/agents/ky-cuschieri-2/" rel="nofollow" target="_blank">Ky Cuschieri</a> of <a href="https://zango.com.au/agencies/luton-tuggeranong/" rel="nofollow" target="_blank">Luton Tuggeranong</a> and is heading under the virtual hammer on Saturday 21 August at noon.“This townhouse opens up a very good opportunity to enter the market,” said selling agent Michael Martin.“Halfway through the campaign we had 55 people come through,” he said.“A lot of people showing interest are first home buyers.”<img alt="1/86 Mawson Drive MAWSON, ACT 2607" class="richtext-image full-width" height="528" src="https://d2t3vhau9g43uy.cloudfront.net/media/images/Screen_Shot_2021-08-18_at_2.08.03_pm.width-800.png" width="800">No. 1/86 Mawson Drive is one of 17 townhouses in the complex. According to Mr Martin, the vendor absolutely loved living in the property, but the time has now come for them to move on to the next chapter in their life.The property itself is the perfect blend of modern design with convenient lifestyle. The floorplan easily flows from room to room and there is an abundance of natural light streaming through at all hours of the day.The kitchen is a key selling feature of the property, with the eye immediately drawn to the impressive stone benchtop and modern appliances.There is ample storage space on offer and the location of the kitchen itself seamlessly flows outside to the courtyard. Cooking on a warm summers evening won’t be a hassle with the breeze from the courtyard cooling the indoor space.<img alt="1/86 Mawson Drive MAWSON, ACT 2607" class="richtext-image full-width" height="532" src="https://d2t3vhau9g43uy.cloudfront.net/media/images/Screen_Shot_2021-08-18_at_2.08.45_pm.width-800.png" width="800">The two-bedrooms are generous in size and have carpet throughout. The main bedroom has the added luxury of a walk-in-wardrobe, modern ensuite, and sliding doors to the private courtyard.The second communal bathroom is located nearby and with a large bathtub.Additional features include a European style laundry, linen cupboard and a double car space with an extra storage unit.According to Mr Martin, this townhouse is unique given the features on offer.“Two-bedroom, two-bathroom townhouses with a double garage are quite rare,” he said.“You don’t get to see too many of them come up because they are very tightly held.”“That would explain the amount of interest we are getting so far.”There are no other listings on <a href="https://zango.com.au/sale/search/?listing_type=buy&amp;address_suburb=Mawson,%202607,%20ACT&amp;surrounding=true&amp;bedrooms__gte=2&amp;bathrooms__gte=2&amp;categories=Townhouse&amp;order_by=-created&amp;property_status_groups=current,underOffer,includePrivate&amp;bedrooms__lte=2&amp;bathrooms__lte=2&amp;filters=1&amp;page=1" rel="nofollow" target="_blank">Zango</a> that shows a two-bedroom, two-bathroom townhouse for sale in Mawson.<img alt="1/86 Mawson Drive MAWSON, ACT 2607" class="richtext-image full-width" height="530" src="https://d2t3vhau9g43uy.cloudfront.net/media/images/Screen_Shot_2021-08-18_at_2.09.04_pm.width-800.png" width="800">According to <a href="https://zango.com.au/research/suburb/mawson-act-2607/" rel="nofollow" target="_blank">Zango data</a>, Mawson has a current median sale price of $820,000. This is a significant increase from last year when the median sale price was $670,000.Mr Martin said Mawson offers a diversity of accommodation opportunities.“There is a range of everything in Mawson – from townhouses, apartments and houses,” he said.The townhouse is just a seven minute walk to Mawson Southland Shopping Centre and three minutes from the neighbourhood oval.<a href="https://zango.com.au/sale/1-86-mawson-drive-mawson-act-2607-45457/" rel="nofollow" target="_blank">Zango data</a> also reveals that No. 1/86 Mawson Drive has been on the market twice before, with the most recent sale being for $500,000 in 2017. Prior to that, the townhouse sold in 2010 for $495,000.For more information, on <a href="https://zango.com.au/sale/1-86-mawson-drive-mawson-act-2607-45457/" rel="nofollow" target="_blank">1/86 Mawson Drive, Mawson</a> contact <a href="https://zango.com.au/agents/michael-martin/" rel="nofollow" target="_blank">Michael Martin</a> on 0411 748 805 or <a href="https://zango.com.au/agents/ky-cuschieri-2/" rel="nofollow" target="_blank">Ky Cuschieri</a> on (02) 6176 3490.

2 news articles with tag first-home-buyers

Saving for your first home? Here’s what you need to know

Golden opportunity for first home buyers in Canberra