Buying your first home should be an exciting and satisfying experience. Fair Dinkum Finance will take the stress out of being a first time home buyer by handling all of the paperwork for you, including the first home time buyers grant. Why would you continue to waste you money on rental properties when you could own your own home.
We have found that 65% of our First Time Home buyer clients had no idea that they could qualify for a home loan with very little out of pocket. Here at FDF we take the time to guide you into owning your own home, whether now or in the future. Most borrower’s are unaware that currently the rent prices are as high if not higher than a mortgage in certain areas and they are going to continue to climb due to short supply in demand.
We also found that people are not informed correctly when they are unable to qualify for a home loan now. they don’t know that although you are not able to achieve your home loan goal now you can start off with a vacant Land package now, wait until you can build your dream home at which point you would have more equity in the land that you are able to use towards your dream home loan once you are ready.
Currently the grant on vacant land is $5000 which is a significant amount that should not be ignored.
Most people don’t know the benefits and savings in being a First Time Home buyer, here are just a few:
One of the most important things to note is that if you are purchasing a new home for $300k or less you can use your grant as a deposit. 5% of $300k is $15k which means you no longer need the extra 5%. Some of our lenders can also use your rental history for qualifications if you don’ have much in savings:
You’ve been renting for more than 12 months, and try as you might saving that 5% deposit for your first home, and paying rent is difficult. But did you know that some lenders can use your rental history to substitute for 5% genuine savings towards a purchase? So long as you can obtain the 5% deposit from other means, such as a gift or inheritance or first home saving grant, your savings problem may be over.
How does it work? There are a few lenders who will accept your past rental payments as an acceptable form of genuine savings (GS). The key points the lender will be looking for are 1) at least 12 months continuous rent history in same property and 2) that the property lease is managed by a licensed property manager/ agent.
Do I still need my 5% deposit? Yes you do need to find at least 5% deposit to contribute to the loan for the property purchase. However whereas ‘genuine savings’ needs to be in your account for at least 3 months, using this strategy your deposit can come from any source such as a gift, savings held somewhere else, business account, sale of car of other personal asset.
What is the maximum Loan to Value Ratio (LVR) a lender to will go to using rental as GS? Depending on the lender some may go to 95% others as high as 97% after including the cost of Lenders Mortgage Insurance (LMI). So if you’re a first home buyer and will be getting the $15k Australian grant you can use this and maybe a gift of money to make the deal acceptable and within the LVR range for the lender.
Do the rental payments need to match the minimum deposit? Generally no, so irrespective of your weekly rent, your 12 months rental history will (in most cases) satisfy the lenders GS requirements. The total rent does not be to equal the 5% of the loan amount being applied for.
Do all banks accept rent as GS? No – only a handful. Knowing which lenders do and the difference in each of their policies is important to ensure your case is lodged correctly. Ask us today and we will source the lending options out for you and create a plan of attack to get you into your first home.
We pride ourselves in being able to provide loans for first time home owners with a hassle free process.
Call us now on 1300 768 618.