First Home Buyers – what do you need to know?
Top tips with Nick: Ep1
We’re going to have a quick chat about first home buyers today, there’s a lot to talk about & so much to for them to know. Nick, where should they start?
There is so much to consider. Many first home buyers are completely starry-eyed when searching for a property. They walk through a home opens and fall in love, but have no idea what to do next.
They might sit in front of someone who will talk about genuine savings, LMI, preapproval, stamp duty, fees, first home owner grants – there’s a huge amount to take in and consider and it can often be overwhelming.
I think the sooner a first home buyer can sit in front of a mortgage broker the better. They will have an opportunity to ask questions, have everything thoroughly explained to them and work out how close they are to being able to reach their goals and the best options available to them moving forward. This will help them gain clarity and take a lot of pressure off when they have found a property that they love – they can just go for it.
I look after a huge number of first homeowners in this market with all the grants that are available to them right now. We really can do everything for them by filling out all of their forms, talk to their settlement agents, anything they need really.
What I get asked all the time, is around the stamp-duty threshold. The level is currently at $430,000, but how does it work if they want to buy a house at $450,000 for example?
There is a difference between established and construction properties. If we start by looking at established homes up to the value of $430,000, there is $0 stamp duty payable for a first home buyer. Then from $430,000-$530,000 there’s a concessional rate which is based on a sliding scale. For example, at $500,000 you should pay $17,000 in stamp duty. You then get a discount and pay around $13,000 give or take. At $440,000 you may only pay $2,000 or $3,000 in stamp duty instead of paying the standard $11,000 or $12,000.
You need to know those numbers up front because you need to know how much is going to come out of your savings. If you don’t know those numbers, you can get yourself into trouble.
What about grants on construction properties that have never been lived in then?
There’s nothing new out there at the moment. I think we should be helping first homeowners with a grant when they buy established homes. Having said that, prices of properties have come down as you know. Securing your first home might not be as hard as you think. We can still do it with a 5% deposit and if you’re under the threshold you won’t be paying stamp duty. Or, as we said, a very minimal amount if you’re just over the threshold. Interest rates are at the lowest levels they’ve ever been too. There is a lot we can help first home buyers with, it is a good time to buy.
I the biggest thing to take away if you are house hunting, is to get pre-approved. It will make the whole process much easier for you; and will take away the stress too.
Thanks to Nick Constantine at Capita Finance. Feel free to contact him for more information firstname.lastname@example.org or on 0418 919 203.