The First Homebuyers Guide

The first homebuyers guide.

(With less jargon)

Contents

How much deposit do you need?

4

Hot tips for getting financially fit

5-7

First Home Super Saver scheme

8-9

First Home Buyers Grant

10

Three types of common loans

11

Repayment types

12-13

The home search

14-17

The costs

18-19

Types of sales

20

The process

22-29

Bankwest Home Finance Managers 30-31

A guide to home loan gobbledygook 32-33

2

Buying your first home should be less confusing.

Before you rush out and buy the first property you see, may we suggest you put the kettle on, make a nice cup of tea and take a moment to read our guide to owning your first home.

A little time spent now, could mean less confusion later.

Ready? Let's get started.

How much deposit do you need?

Why not use the Bankwest budget

The 20% or larger deposit.

A deposit of 20% of the total cost of a home is ideal, but not always required (keep reading). A larger deposit means a smaller home loan, and could help you avoid Lender's Mortgage Insurance ? also known as LMI. It may even secure you a lower interest rate. Your deposit will generally need to be 20% of the property value, plus fees and stamp duty.

Less than 20% deposit.

Don't have a 20% deposit right now? There are low-deposit options out there. Depending on your circumstances and the property you want to buy, the minimum deposit amount can vary and be as low as 5% of the property value, plus fees and stamp duty. With a lower deposit, you may need to pay LMI.

planner tool? I do.

.au/ budget-planner

A 20% Deposit Example > 20% Deposit > 80% Home loan > No LMI required

The genuine savings rule.

If your deposit amount is less than 10% of the property value ? the `genuine savings' rule applies. Genuine savings of 5% of the property purchase price must be held for a minimum of three months in an account in your name. The genuine savings amount can be made up of savings, the sale of shares or non-repayable gifts from immediate family.

A Low Deposit Example > 5% Deposit > 95% Home loan > LMI required

Lenders Mortgage Insurance (LMI).

LMI insures the Bank in the event that you can't pay your mortgage. LMI applies if your deposit is generally less than 20%. You can pay LMI upfront or include it in your home loan. Keep in mind if you include LMI in your loan amount you will pay interest on that amount. Make sure to get the full low down from your Home Finance Manager or Broker.

Hot tips for getting financially fit.

Remember when your parents told you to spend less and save more? Yeah ? they were right. The key to saving is knowing what you earn and what you spend. Sound simple? It is.

4

5

1 Get started.

2 Budget, budget, budget.

Once you're armed with all the information, you'll find it easier to set realistic savings targets.

Have a good look at your bank e-statements or your online banking to see where you're spending and where you can start saving.

Know the numbers? Right, let's set some budgets.

First, how much money do you need to cover expenses and the fun stuff you simply cannot go without.

Think about all the unnecessary things ? do you really need that new designer t-shirt?

Okay, now, what's left?

Be realistic and start small, don't stop doing the things you love, but make sure you start spending less elsewhere.

If you love a morning coffee ? enjoy it!

But spend less on something else.

6

3 Aim for the goal posts.

Visualise your goals. Having something to save for can make saving feel worth it. Write down your goal and how much money you want to save. Then stick it on the fridge. Having it as a visual reminder could help keep you on track.

4 Managing debt.

Got a personal loan or credit card to pay off? You're not alone. Chat to your financial provider about consolidating your debt. When you have multiple debts, the fees and interest can stack up.

5 Your credit report.

Most people are guilty of paying the odd bill late. But, it's important that you think about how this affects your credit report.

Your credit report is what helps determine your suitability for a home loan, so it's important. It also helps your lender understand whether a home loan might put you in financial difficulty.

Your credit report will include certain information about your credit history provided by your bank, as well as other financial institutions who provide information to credit reporting bodies.

The good news? If you're already making repayments on time there shouldn't be anything to worry about.

And if you're not, you can start taking steps to get things sorted and build a healthy credit report.

Is your goal, your first home?

A Bankwest Home Finance Manager can help. And not just with the paperwork. They can also help with savings plans to get you those keys even faster.

7

How about a helping hand?

When stepping onto the property ladder, the first step is often the hardest. Luckily, help is at hand with grants available for first time buyers. Let's discuss.

The First Home Super Saver scheme. Aka the FHSS scheme.

The FHSS scheme allows you to save money for your deposit in your superannuation. You can make voluntary contributions to your FHSS fund (up to $30,000) from any age, but your money cannot be released until you're 18 or over. Super.

Grants can really help.

8

Do you qualify?

To qualify for the FHSS scheme, you'll need to meet a few requirements. See if you can tick all the boxes below.

You have never owned a property in Australia.

You're not purchasing a houseboat, motor home, vacant land (unless you intend to build a house within 12 months) or premises not capable of being used as a residence.

You intend to live in the property for at least 6 months after settlement.

You have not previously released FHSS funds.

If you can't tick all the boxes, there may be exceptions. Talk through your options with a professional advisor or check out the ATO website for more information. Some rules and restrictions will apply.

FHSS facts.

The FHSS is only available on some superannuation schemes. Check with your provider to find out if this is available to you.

Once your FHSS funds are released, you have up to 12 months to sign a contract or construct a home.

For all the information search `FHSS' or check out .au

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