SAF Finance Mortgage Broker Melbourne

First Home Buyers

LET’S FACE IT, BUYING YOUR FIRST HOME IS A BIG STEP. AS WELL AS THE FINANCIAL SIDE OF THINGS TO THINK ABOUT, EVEN JUST THE PROCESS OF BUYING CAN SEEM CONFUSING.

With so many different people involved and all that paperwork, it can be hard to know where to start. But it can also be fun. Finding your perfect place, and planning how you’ll furnish and decorate it is really exciting.

So don’t worry, if you’re feeling a bit overwhelmed, help is at hand SAF Finance Group will guide you through the process.  To make things a little easier, we have created a step by step guide to help you understand the process.

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STEP 1 – WHAT CAN YOU AFFORD
HOW MUCH MONEY WILL I NEED?

As a first time buyer, you might not have a large bundle of cash to buy a new home. It’s more likely you’ll need a loan secured against your new home.  Your loan repayment are usually set on a 25 to 30 year loan term, in monthly installments.

So before you start house hunting, work out how much you’re willing and able to afford in loan repayment.  Take in to consideration, your spending and saving habits to ensure that future life changes wont impact your lifestyle.

SAVING FOR A DEPOSIT

It’s important to make sure your savings can cover the costs of buying your first home. You’ll need to put down a deposit (usually at least 10% of the purchase price) on the property.

OTHER UPFRONT COSTS TO THINK ABOUT

It’s important to get the full picture of what buying your new home will cost. As well as the deposit and purchase price, there will be other one-off fees that will be added to your new loan.  Each Lender has different fees and charges and this may also help determine which lender is better for your particular situation.

Legal Fees

A Conveyancer or Solicitor carries out all of the legal work involved in buying a property.

Valuation Fees

The lender arranges a mortgage valuation on the property to confirm the use and value of the property.  They also check the condition of the property to ensure the property is habitable and there are no other risks associated with the property.

Disbursment Fees

The conveyancer pays these to other third parties on your behalf, so he can obtain searches on the property.

Building & Pest Inspection

For added peace of mind, a survey goes further – checking the building is sound and highlighting major problems. A pest inspection will ensure that there are no pests or rodents that will effect the structure and quality of the property.

Stamp Duty

A Conveyancer or Solicitor carries out all of the legal work involved in buying a property.

Loan Application/Establishment Fee

Most mortgages have a product fee. This can usually be added to the mortgage and is subject to interest.

Lenders Mortgage Insurance (LMI)

Lenders’ Mortgage Insurance (LMI) protects a lender against loss should a borrower default on the loan and the property is subsequently repossessed and sold. The insurance covers the amount from the sale where it is not enough to pay off the loan in full to the bank or lender. LMI is payable by the client.  To avoid this fee you must have a 20% plus enough funds to cover your borrowing costs.  LMI is a once only fee which is paid at loan settlement. How much money you borrow and the size of your deposit will determine the fee amount for the LMI.

Building Insurance

Buildings insurance covers you financially against damage to the structure of your home. This includes permanent fixtures and fittings against loss or damage by an insurable peril such as fire or flood.

Loan Protection Insurance

Loan Protection Insurance provides financial assistance where you suffer a serious illness or injury that is likely to prevent you from making your loan repayments for a period of time.

10% Contingancy

For peace of mind it’s worth having additional savings to cover any unexpected costs.

HOW MUCH COULD YOU BORROW?

Contact us at SAF Finance Group, we’ll give you an understanding of what you will be able to borrow and which lenders and products are available to you, ensuring you are able to meet long and short-term goals.

We will complete a full finance assessment and loan comparison, ensuring you can afford the loan repayments even if interest rates rise.  All fees associated with a loan will be outlined so you know exactly what is required from you.

At this stage, we suggest that we apply for a pre approval with your preferred lender.

Working out what you can borrow and having a pre approval in place might be easier than you think.  This could put you in a strong position when making an offer on a property. It’s proof that you’re serious and can get the money to buy it.

PRE APPROVAL PROCESS:

They’ll run a quick check on things like your address history, current earnings and any outgoings such as loans and credit cards that you might have.

Of course, the pre approval depends on a satisfactory valuation of the property to be mortgaged and the information you’ve given is confirmed.

We recommend that you obtain a copy of your credit report from Veda prior to applying for finance.

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