For most first home owners looking to buy or build a home, there can be a lot of confusion on where & how to start researching everything about home finance.
While everyone’s borrowing capacity differs due to individual personal circumstances, we have put together some first home buyers finance fundamentals to help guide you in the right direction.
1. Can you afford a house?
When you decide that you want to buy a home, the most logical first step is to find out if you can actually afford to buy one.
The first step we recommended is chatting with an Easystart Consultant who will put you in touch with one of our expert finance brokers, who will assist you in securing pre-approval or conditional approval.
The process of getting a pre-approval involves applying to your selected lender who will check your finances and assess whether you’ll be able to repay a loan. This is where your broker will be able to help you out and find the best bank and home loan for you.
2. How much can you borrow?
How much you can borrow for a mortgage differs from person to person and is dependent on a number of factors including;
- The size of your deposit
- Your credit history
- Your employment history
- Your current level of debt
- Your current income
At Easystart Homes, we can help you determine exactly how much you can borrow towards a home. As we're a first home buyer specialist, we go the extra mile to and look at a range of different home loan products designed to help people with low savings, high debt or poor credit history.
In fact, we have helped many people with these same challenges get into their own new home.
3. Be mindful of debt
One of the biggest things that can affect your borrowing capacity is the amount of debt you already have. Banks pay close attention to personal loans and credit card debt, even Afterpay and Zip Pay - and some people don’t realise this can work against their chances of securing a home loan. Reducing your debt can help improve your home loan outlook considerably.
If you do have debt, there are options out there for you - here at Easystart Homes, we offer a Debt Assist solution. With Debt Assist, we pay your debts up to a certain amount to help you get in control and qualify for a home loan. We'll help you get out of debt - and get on the path to owning your home.
4. Seek out a first home specialist
First home specialists are exactly that! Experienced professionals who solely focus on helping first homebuyers apply & get approved for home loans. As a result of that experience, first home specialists are more in tune with the challenges that many first homebuyers have and understand the information that's required.
Easystart has built thousands of homes for first homebuyers just like you, and as a first home specialist we know how to access loans from low income lenders, we can offer solutions to reduce your debt or increase your deposit as well as help you access Government incentives like the first home owners grant.
Not only do we know how to access these things, we help to guide you through the entire process from start to finish.
5. Find out if you're eligible for any government incentives
The WA State Government has made the home buying process easier for first homebuyers with its $10,000 WA First Home Owners Grant. The grant is available to eligible first home buyers building or buying off-the-plan, or purchasing newly built homes.
It is available for purchases of homes in Perth up to the value of $750,000.
The good news for first home buyers is there are stamp duty concessions and exemptions and homes purchased with a value of less than $430,000, do not owe stamp duty. There are also concessions for homes priced between $430,001 to $530,000
Find out more about the First Home Owners Grant here.
6. Read up on Keystart home loans
Keystart is another government initiative designed to make home ownership affordable for those who don’t meet the criteria for home ownership with traditional lenders (most commonly banks).
For homebuyers that qualify for assistance, Keystart offers home loans from as little as 2% deposit with no lenders mortgage insurance (LMI) which can save you tens of thousands of $$.
For more information on the low deposit home loan initiative visit our Keystart information page.
If you're ready to get started on your new home journey, or would like to know more about Finance and want to chat to someone (obligation free!) then you can submit an enquiry through our How Much Can I Borrow tool. This will give our team the basic info that they need to start a productive conversation about getting you into a new home.