The essential first Home Buyer Loan guide

Mortgage pre approval is an examination of a home buyer’s finances, which requires proof of employment, assets, income tax returns, and a qualifying credit score. It means the lender has checked the buyer’s credit, verified assets, and confirmed employment to approve a specific loan amount. Pre-approval is based on a home loan application and important documentation

The amount of deposit required for a first home buyer home loan in Western Australia varies from 2%-20% depending on the lender and the type of loan. Using the Home Guarantee Scheme, you can buy your first home with a deposit of at least 5% and without paying lenders mortgage insurance (LMI). 

For West Australians, Keystart is a low-deposit, owner occupier home loan option which requires a deposit of only 2%. Learn more here. 

While not mandatory, it is highly recommended that first home buyers in Western Australia obtain a building and pest inspection before purchasing a residential property; particularly if you buy an established home. This can help identify any potential issues with the property and avoid costly repairs in the future.

The FHOG is a government grant of available to eligible first home buyers in Western Australia. In WA, it is a one-off payment of $10,000 to assist with the purchase or construction of a new home, though this varies between states and territories. The grant amount varies depending on the property location and the date of the contract. To learn more about the grant, click here. 

To qualify for the FHOG in Western Australia, there are a few eligibility criteria. For instance, you must be an Australian citizen or permanent resident, over 18 years of age, and have never owned a residential property in Australia. You must also be purchasing or building a new home, and the property value must be below a certain threshold. 

For more information relating to the criteria and your eligibility, click here. 

Below are the key steps to getting your first home buyer mortgage and getting into your own home:

• Check your credit score: Your credit score is an important factor in determining your eligibility for a home loan. A good credit score can help you get a better interest rate and loan terms.
• Determine your budget: Before you start looking for a home, determine how much you can afford to spend. This will help you narrow down your search and avoid overspending.
• Get pre-approved: Getting pre-approved for a home loan can help you determine how much you can borrow and what your interest rate will be. This can also make you a more attractive buyer to sellers.
• Research loan options: There are many different types of home loans available, so it’s important to research your options and find the one that best fits your needs.
• Apply for a home loan: Once you have found a lender and a loan that you are comfortable with, you can apply for the loan. Be prepared to provide documentation of your income, assets, and credit history.
• Close on the loan: Once your loan is approved, you will need to close on the loan. This involves signing the loan documents and paying any closing costs.
• Move in: After you have closed on your loan, you can move into your new home!

Remember that there are many resources available to first home buyers, including government grants and schemes, down payment assistance, and education courses. It’s important to do your research and take advantage of these resources to make the home buying process as smooth as possible

In addition to the FHOG, there are other government grants and schemes available to first home buyers in Western Australia, such as the Home Buyers Assistance Account, Keystart Home Loans, Home Guarantee Scheme, and the First Home Loan Deposit Scheme. These programs offer financial assistance and support to eligible first home buyers.

Lenders mortgage insurance (LMI) is a type of insurance that protects the lender in case the borrower defaults on their home loan. It is typically required for home loans with a deposit of less than 20% of the property value. However, using the Home Guarantee Scheme, you can get into your first home with a deposit of as little as 5% without paying lenders mortgage insurance. 

To avoid paying LMI, you can take advantage of the Home Guarantee Scheme, use a Keystart home loan, save a larger deposit, or consider a guarantor loan, where a family member provides security for the loan.

Stamp duty is a tax on property transactions that is payable by the buyer. The amount of stamp duty varies depending on the property value and location.

Yes, first home buyers in Western Australia are exempt from paying stamp duty up to a certain threshold.

If you are buying vacant land, you are exempt from stamp duty if you pay less than $300,000 for your land. A stamp duty concession is available between $300,000 and $400,000. 

If the home you are buying costs less than $430,000, you will not have to pay stamp duty. A reduced rate is also available between $430,000 and $530,000. 

Under certain conditions, first home buyers in Western Australia may be able to use their superannuation to purchase a home. This is known as the First Home Super Saver Scheme.

The settlement process is the final stage of the home buying process, where the buyer and seller exchange funds and legal ownership of the property is transferred. This process is typically handled by a conveyancer or solicitor.