Buying your first home
We'll walk you through buying your first home
Buying your first home is often an exciting, but also overwhelming experience filled with challenges and decisions that need to be made along the way. Whatever your needs might be we’re here for you every step of your journey to make your big purchase as seamless as possible.
Our beginners guide to buying your first home
The journey to buying your first home is similar to venturing into the great unknown and can be filled with endless stumbling blocks and difficult decisions that need to be made. We’ve gone to great lengths to break down the jargon barriers and help you navigate your moving journey with ease.
Here are some of the benefits of financing with us when you’re buying your first home:
- Speaking to the same person every step of the way
- Access to our competitive home loan rates
- 100% certified sharia compliant
What to consider when buying your first home
First steps to buying your first home
Buying your first home can be a life-altering venture with many highs and lows along the way. Maybe you’re moving out of home for the first time? Maybe you’ve just completed your studies and you’re starting your first job? Either way, we’re here to help simplify the process.
Here are some key points to consider when buying your first home:
- Set yourself a budget and understand what you’re currently spending money on
- Understand what you can borrow
- Know what your deposit amount needs to be
- Consider how long you intend living in the property
- Know what your monthly repayments will be
- Work out a savings plan for rainy days
- Understand the upfront and ongoing costs of home ownership
- Once you’ve settled on a suburb, research the area and home pricing
- Investigate if you’re eligible for a first home buyer grants or the Homebuilder grant
Understand what your home buying costs are
What are the upfront and ongoing costs
When buying your first home it’s important to consider all of your expenses, including not only the more obvious upfront costs, but also ongoing costs that will also need to be accounted for.
- Stamp duty – a duty or tax charged by the State Government for specific transactions, including purchasing your first home. The amount is determined by the purchase price of your home. We’ve got a handy stamp calculator here
- Lenders mortgage insurance – only required if you have less than 20% of the home deposit
- Legal fees – for completing conveyancing and title searches on your new home. Costings can vary, but generally should be around $1,500 to $2,500
- Building and pest inspections – this is a report on the structure and condition of the home you’re purchasing. This cost varies depending on the Building and Pest Inspector, but can be around $400 – $700
- Home and contents insurance – covers the cost of replacing or repairing your household possessions in the circumstance of accidental loss, theft or damage
- Property valuation – an independent valuation of your home to determine what it’s approximate worth
- Moving costs – hiring removalists or a van, in addition to the cost of boxes
- Remodelling – often home new homeowners may want to update the property before they move in eg. new blinds, or even bigger projects such as new bathrooms or kitchens
- Mortgage repayments – most lenders will offer a flexible repayment option suited to your pay cycle.
- Council rates – houses generally attract a high fee than units
- Body corporate fees – apartments and units often charge residents body corporate fees for the general maintenance of common areas
- Utilities eg. gas and water
- General maintenance eg. cleaners and gardeners
- Repairs and breakages eg. leaking taps
Working out your buying budget
What you can borrow and afford
Now you understand what your upfront and ongoing costs are it’s important to drill down on your budget. Every home buying journey should begin with a clear budget in mind. Budgets help us understand what we’re spending, where we can save and what we can afford. In layman’s terms, your budget is your expenses minus your earnings, and what remains could potentially be your savings.
When organising your budget don’t forget to also include what you plan on saving per month to help you work towards any future financial goals you might have. Remember your borrowing power will be likely be affected by your income and also your expenses.
A lot to read?
We understand there is a lot to read but we want you to be fully ready to buy your home. Before you continue reading the next few steps, perhaps do the following:
Or you can simply continue due to the excitement of buying your first home.
Other important considerations
Should I get a conditional approval?
Obtaining a conditional approval is a great way of getting an actual estimate as to how much you can borrow and find out whether you will be approved for a loan. It is also a great way of showing real estate agents that you’re a serious buyer and can speed up the finance application process once you have signed the contract of sale.
How much deposit do I need?
The minimum home loan deposit you should have with Hejaz is at least 10% of the purchase price of the property. Due to credit laws in Australia, Lenders Mortgage Insurance will apply if your deposit is less than 20%, which is a one-off fee that covers your lender against loss if you default on your repayments. This fee is added to your loan amount and allows you to borrow more than 80% of the property value for home loans.
Am I entitled to the first home owners grant?
Government grants are a great way to receive financial assistance when buying your first home. However, depending on where you buy, your eligibility requirements for your first home owners grant and the amount you may be entitled to varies from state to state.
What grants are available to me?
For more information about grants available to first home owners, feel free to use the power of google:
- First home owners grants
- Homebuilders grant (if you are building your first home).
Approval for your first home loan
When you’re applying for your first home loan we will assess you on many factors. We will want to ensure you can repay your finance over the course of the loan. The assessment will be broken down into three categories; what you earn, what you owe, and what you own.
Some of the factors we will assess you on during your home buying journey:
What you earn
- Salary – you’ll likely need to supply two of your most recent payslips as proof of employment
Investments – any earnings from shares, managed funds, we will likely require proof
- Rental income – if you receive rental income you will likely need to supply statements
- Government income – if you receive government support
What you own
- Savings eg. a term deposit amount
- Substantial personal assets eg. a car
What you owe
Credit cards or loans eg. students debts, leases
Here are some important documents you’ll need as proof of identification:
- Current drivers licence and/or current passport or birth certificate
- Council rates notice, credit card, debit card, Medicare card, health care card
Making an offer on the home
Once you’ve found the first home of your dreams, it’s time to make a formal offer. While negotiating your price with the seller can often be a challenging experience, it’s important to remember to not be too inflexible, while also still be cautious.
Some considerations to make when making an offer on your first home:
- Private sale offer – sale through a real estate agent, by private treaty or directly from the owner is the most common way to purchase property
- Bidding at auction – prior to purchasing a home at auction it’s usually necessary to have pre-approved finance. It’s important to remember that purchasing at auction doesn’t typically allow a cooling-off period should you decide to not proceed with the purchase
Final steps for buying your first home
Once you have reached an agreement with the seller, the settlement process can begin. On settlement day, your legal and financial representatives will ordinarily meet with the seller’s representatives to transfer the ownership of the property from the seller to you (the buyer). The settlement date is set in the contract of sale, and is typically between 30-90 days.
To prepare for settlement, you’ll likely need to do the following:
- Contact a solicitor or conveyancer to review your contract of sale before you sign it
- Return your signed contract of sale to the seller or the seller’s agent
- Speak to us to start your home finance application. Ensure you have all your necessary documentation
- Speak to your solicitor or conveyancer about requesting any property searches you may want or need
- Organise a building and pest inspection
- Ensure you have enough funds to cover the property settlement and solicitor’s fees
- Organise your final inspection of the property. This is usually done on the day of settlement or close to it
- Collect your keys on settlement day and celebrate your new home
Ready to proceed?
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