Admiral Home Loans

Over the last year, my clients that are First Home buyers have ranged in age from 18 years to 70 years (yes, he got his loan approved). This is in contrast to the misinformation in the press that says that it is now too expensive to buy your first home.
The issue of age in itself is not generally a problem to lenders.
Banks and non-bank lenders will generally approve applications from First home buyers like anyone else – based on the merits of the whole application.

Many people mistakenly believe they have to save for a deposit before they can approach a lender for a home loan.
Worse still many think they first have to establish a credit rating before they can get their first home loan.

Buying a home can be easier and more affordable than many have been led to believe.

Brad Thrupp of Admiral Home Loans admitted that first home buyer applicants tend to be a couple that both work and have no children. Because they have 2 incomes they tend to be able to buy a great home and when they don’t have other personal loans and credit cards they can usually comfortably handle the payments.

When I met a young couple recently, they asked what are the costs involved with buying our first home (besides the actual purchase price).
I explained that the main costs included;
• Legal fees (actual professional costs for the solicitor advice and guidance as well as the various searches they do). Most firms have a set fee depending on which city/shire that you are buying in. Most clients would not go over budget if budgeted $1700 for legal costs.
• State Government fees. For most first home buyers, this will be about $800 to cover the cost of registration of the mortgage and registration of the title. There are extra fees if the purchase price is over $500,000.
• Bank fees. Most lenders have establishment/ application fees some don’t (but you will find that most lenders fees – by whatever name will be covered inside $1,000.
• Building and Pest inspection. Some companies do one or the other, but the easiest way to go is with the companies that do building AND pest inspections. Most service providers will do this for $450 to $600.
• Mortgage Insurance is by far the biggest outlay that first home buyers have to cover. Mortgage Insurance has a premium that is paid by the borrower essentially to protect the lender in case of default on the loan repayments. As most First Home Buyers will borrow 97% of the purchase price, the cost of the mortgage insurance will add up to as much as $10,000 (much more in some cases – it depends on how much you borrow and the % of the purchase price that you are borrowing). Some first home buyers don’t have to pay mortgage insurance. This happens when they have a friend or relative who also offer their home as extra security.

It is really amazing to see how people become more confident as the process unfolds. They start out just wanting to buy their own place, and then it grows into a learning experience of jargon, alternatives and deadlines, culminating to the big day when they get the keys.

The reasons many first home buyers manage to get into their own place is because they;
• become committed to their goal
• they ask lots of questions
• potentially can borrow up to 100% (110% in some cases) of the purchase price.
• First Home Owners Grant (FHOG) of $7,000 is a big help with some of the costs I spoke about earlier
• They don’t get put off by ‘doom and gloom’ articles in the media

First Home Buyers can also be First Home ‘BUILDERS’.
Yes, lenders will still finance construction and the government will still give them the FHOG.

A young couple I know are expecting their 2nd child soon. They are building what will be their first house. They have a new game they play called the “daily drive by”. They go to the site every day to see where the builders are up to. The builders don’t mind if they come in and have a look around and take an interest in how it all takes shape and becomes their home on handover day.

I met a guy the other day who said he recently read that the best time to buy was 25 years ago. The next best time to buy is now. That is what I call a timeless statement.

Enjoy looking for your first home and don’t forget, the best place to start is;
• ask your Mortgage Broker how much you can borrow and
• what the repayments are that will suit you.