Buying your first home can be a daunting process. To help you start your property buying journey, Mortgage Choice outlined some of the key things you need to know as a first home buyer.
How much deposit do I need?
As a general rule, lenders will want you to have a deposit that is at least 5% of the purchase price as a minimum. But if your deposit is less than 20%, you'll have to pay Lenders' Mortgage Insurance (LMI). You can avoid this if you have a family member go guarantor on your loan or receive a financial gift to boost your deposit size.
What is LMI?
LMI is a fee that you're required to pay if you have a deposit that is less than 20% of the purchase price. This actually protects the lender, not you, if you default on your home loan repayments.
How much stamp duty do I have to pay?
The amount of stamp duty you have to pay depends on a range of factors such as the value of the property, the type of property and the state or territory that you live in.
Do I qualify for any concessions?
If you're a first home buyer, you may be eligible for a number of first home grants and stamp duty concessions which vary depending on where you live. There's also a national Super Saver Scheme, which was introduced by the Federal Government last year, this allows you to save for a home deposit through your superannuation.