Page 9 - Smartline eBook - First home buyer

It’s important you have some money left over to enjoy yourself and maintain your lifestyle, so if you feel it would be too much of a commitment, you can always reduce the size of your loan and the value of the home you’re willing to buy. This also allows for some flex in the event interest rates go up or if your circumstances change.
What’s on your horizon?
Paying off a mortgage requires consistency, so if you’re planning to leave your job soon – or if you’re planning to take a considerable time away from work for family commitments – you should factor this into your planning.
Could you handle an interest rate rise?
Interest rates have been at historic lows but they’re likely to rise at some point in the future. While a lender will factor this into how much they’re likely to lend to you, you should also make sure you’d be able to meet your loan repayments if interest rates rose by, say, two per cent.
What’s your deposit?
How much you have saved and can use as a deposit will go some way to determining how much you can borrow, what you can afford and whether you’re ready to buy. While you can take out a home loan with as little as a five per cent deposit, you’re likely to face the added cost of Lenders Mortgage Insurance (LMI).
You may be able to avoid paying LMI if you have the support of a family guarantee; however, this will depend on whether your lender provides for this option.
What grants and concessions will you receive?
Depending on which State or Territory you live in – and the value and type of property you buy – you may be entitled to a First Home Owner Grant (FHOG), as well as a stamp duty exemption or concession. You may also be entitled to the First Home Loan Deposit Scheme. These can help you get onto the property ladder sooner by reducing the amount you need to pay upfront.
Do I qualify for the First Home Owner Grant?
The First Home Owner Grant (FHOG) provides a one-off payment to people who are buying or building property for the first time. The rules about who can access the FHOG vary from state to state.
Your Smartline Mortgage Adviser can help you gather the documents you need for your application and lodge it. For more details on FHOGs, please download the First Home Buyers Fact Sheet for your state:
New South Wales Northern Territory Queensland
South Australia Western Australia Tasmania
Victoria
First home buyer guide 9