Are you searching for your first home loan?
My Finance House offers a unique, complimentary and exclusive mortgage service for first home buyers.
Our fully qualified finance specialists help first home buyers across Australia.
At My Finance House we have got all bases covered for first home buyers, scroll below to learn more about our mortgages:
LOOKING FOR SOMETHING SPECIFIC?
Estimate how much you can borrow and avoid unnecessary loan rejections.
If you go directly to a bank they will deem the first step to be the home loan pre-approval application. However, at My Finance House we don’t believe this the case – if you are pre-qualified as first home buyer the chances of getting pre-approved are much higher! If you believe you are eligible for your first home loan, it’s important to prepare yourself and determine how much you can borrow before submitting a pre-approval application. We will use a wide range of information to determine if you qualify a home loan now.
A pre-approval is critical for first home buyers.
When it comes to buying property, carefully considering all your circumstances & options, and having to act fast when you need to can be quite a challenging task for first home buyers. A home loan pre-approval involves the lender checking your credit history, verifying your income, and on the basis of that information, providing you with a figure you can borrow for your first home. A pre-approval is usually subject to a range of conditions being met by the first home buyer – these will vary from lender to lender.
A pre-approval can also be referred to as one of the following terms by some lenders; conditional approval, approval in principle or indicative approval.
Compare and get the right loan for you
Finding the perfect property for your first home can be an exciting step however it is also important to find the home loan that matches your unique situation and meets your financial goals. Below you can compare the features of the different loans that suit buyers who are purchasing for the first time. There are plenty of hot home loan deals out there in the competitive home loan market that offers no ongoing fees, a low-interest rate and let you borrow at least 95% of the property value.
Types Of Loans
Variable Rate Loans
Variable home loans are the most common loans for borrowers that are offered by lenders. Most first time home buyers take this loan. The rate fluctuates according to the cash rate, as set by the Reserve Bank, however there is nothing stopping the lenders from moving their rates up or down at their own discretion. The features and rates offered by different lenders depend on the amount you are borrowing and the strength of your application.
Fixed Rate Loans
Fixed rate loans are gaining popularity as interest rates remain at record lows. If you are looking for security through certainty of repayments, then a fixed rate home loan may be something that you will seriously consider for your first home loan. The fixed home loan has fixed interest rate for an initial period and the repayment period is also fixed which varies from 12 months to 10 years. Generally, you will be able to lock your repayment between 1-5 years, at a competitive rate. It gives stability to the first home buyers in your initial first home life.
Split loans offer the best of both worlds. This option provides security and flexibility – a great option for those that can’t decide whether to choose a variable or fixed rate loan. A split loan allows you to allocate a portion of your loan amount to a variable interest rate, and the rest of the loan to a fixed rate. You are able to take advantage of the security of a fixed rate but with the flexibility of a variable rate, as well as provide you some security if interest rates were to rise in the future. Split loans are particularly effective where you are constructing, many first home buyers choose to fix the land portion and keep the construction portion variable.
100% Offset Home Loans
A mortgage offset account is a transaction account that is linked to your home loan. The balance in your account is “offset” daily against your loan balance (that is where the ‘offset’ comes from).The lender essentially treats it as money you have paid off the loan. The more money you have in the account, the less interest you pay on your home loan. 100% Offset Home Loans are effective for those first home buyers who anticipate they will be able to save additional funds after making their minimum monthly repayments. Most lenders will offer 100% offset home loans on variable rates, whilst some even offer then on fixed rates!
A construction loan is a type of home loan designed for first home buyers who are building a home as opposed to buying an already complete or established property. It has a different loan structure to home loans designed for people buying an existing home. A construction loan has a progressive payment system whereby the loan amount is increased as needed to pay for the construction progress payments. The good news is that similar interest rates, features and deposit requirements apply for most loans, including construction loans.
Low Doc Loans
A low doc (or low documentation) loan is a type of home loan that can be approved without the normal income verification means, i.e. payslips and tax returns. Low doc loans are only available for self-employed first home buyers (i.e. those that operate under an ABN). For a full-doc (standard) loan most lenders will require you to provide tax returns for income verification purposes, for a low-doc loan you are required to complete a self-verification income form, provide BAS statements, business bank account statements or an accountant’s declaration.
Credit Impaired Loans
Credit impaired loans (also known as bad credit home loans) tend to suit borrowers who have experienced credit problems in the past – these may make it virtually impossible for you to get a standard mortgage approved. These type of loans exist for those first home buyers who may have turned their credit problems around and have enough savings to get a home loan. Plenty of circumstances could affect your credit history; from identity theft, sickness and divorce, to simply forgetting to redirect your bills when moving house, resulting in missed or late payments. We feel you shouldn’t be punished and you should still be able to realise your Great Australian Dream of ownership.
No LMI Loans
Whilst only a select number of aspiring first home buyers may qualify, it may be possible to get the lender to completely waive your LMI premium – if you are borrowing 80% – 90% of the property purchase price. However, to qualify for the LMI waivers most lenders will usually require you meet their criteria. Certain professionals can also have the LMI waived if they work within specific fields like the medical & accounting industry. Some lenders will also waive LMI on a case by case basis for loans that only slightly go over the LMI threshold. MFH can provide advice on whether you qualify for a no LMI loan or not.
Low Deposit Loan
We can help you own your property sooner
If you want to buy your first home, but don’t have lots of savings, our low deposit home loan options can help you. Your deposit is one of the most important considerations. You may have been saving for years, or you may have limited money put aside, at MFH, we understand that everyone is different. And that is why we have access to a range of products that will suit your personal situation.
Most lenders require a minimum of 5% genuine savings as deposit to purchase your first home. This means you must have the 5% deposit amount in your bank account for a period of time (usually three months) to prove to your lender that you’re able to save. However, at MFH, we understand that you might not always be able to demonstrate genuine savings, or have the full 5% saved. That’s why we work with you and our extensive panel of lenders to find a home loan that’s right for you. We even have access to a number of products that may allow you to get into your new home without genuine savings, or with less than the full 5% deposit.
Parent Guarantee Loan
Your parents may be able to help you own your first home sooner.
Have you ever had a conversation with your parents regarding assistance for your first home purchase?
Whilst it is not that uncommon for parents to gift their children large sums of money for the purpose of funding their first home deposit, the reality is that most parents can’t afford to gift money to their children. As housing affordability has worsened across the country, the equity of current home owners has grown whilst an aspiring first home buyer’s ability to save for their first home deposit has diminished.
For those who have parents who can afford to and are willing to help you out, here are the most common forms of parent assistance:
- Cash Gift
- Informal loan between yourself (the first home buyer) and their family members
- Family guarantee
Whilst a parental guarantee for a first home buyer’s loan is still the most common form of assistance, new products & agreements are being introduced to protect the security the parents are providing.
No Deposit Loan
If you’re trying to buy your first home, but the banks or other mortgage brokers won’t talk to you because you don’t have the deposit, you may still be eligible for a no (zero) deposit home loan!
With many homebuyers struggling to come up with the significant deposit required to secure a home loan, it is becoming increasingly difficult to get into a new home. We stress this option may not be for everyone and does come with some extra risks and costs, however, if you really want to own your first home this is definitely an option.
Another method of buying your first home without a deposit is to receive parental assistance.
Our experienced finance specialists are happy to guide you through the 4 step process. Please note, this option is mainly available for first home buyers looking to buy a brand new First Home Owner Grant (FHOG) eligible home.