Escape The Rent

If you’re planning to buy your first home, you’re probably mulling over different finance options and how to procure them. Calculating interest and deposit amount, figuring out mortgage, visiting banks, checking your eligibility for government grants are all parts of the drill. However, the option that attracts most first time home buyers is Low Deposit Loans. In this article, we will discuss Low Deposit Loans for first home buyers.

Using the First Home Owner Grant as Deposit

Let’s start with the first Home Owner Grant (FHOG) by the government. You can use your FHOG for a part of your deposit. Nevertheless, you will still have to account for other upfront costs of purchasing a home, such as brokerage, legal fees and moving expenses. If you purchase a brand new house or a completely renovated one, the FHOG is normally paid on settlement. On the other hand, if you build a new house, the FHOG is typically paid when you make your first payment on the loan. Moreover, every state and territory has different requirements for FHOG, whereas some states offer FHOG only to people buying new homes. So make sure you check the requirements of your state and account for other expenses from your FHOG. You might also qualify for Keystart Finance as a first home buyer, which means you will only need a 2% deposit.

Basic Criteria for Low Deposit Home Loans

There are different low deposit loans available for first time home buyers. These have different conditions and borrowing criteria. But as a general rule of thumb, you need minimum savings of 5%-10% of the total purchase price in case of low deposit home loans.

There are other options to make securing your home loan easier. For instance, some leaders allow borrowing to the tune of 105% of the property value with a guarantor loan and 95% of the property value without a guarantor. Moreover, if you have a guarantor, you would normally not need a deposit. If your parents own their home and want to guarantee a part of your deposit, they could be your guarantor. Besides, if their guarantee is worth more than 20% of your home’s value, you may also be able to avoid paying lenders mortgage insurance. Additionally, you can also use a gift or an advance from your parents as your deposit.

How to Get a Low Deposit Loan as a First Home Buyer

The process of building a luxury home is a distinctive experience. Everything including the house design, procuring the materials, and the interiors are done in a way that’s unique to a luxury house. Someone who’s willing to invest in an upscale house has to pay attention to every detail to ensure that the result is as desired. As Hubert de Givenchy famously put, “Luxury is in each detail”. Thus, it’s important to choose the right builder who can deliver exactly the house you want, especially if you want a plush home. In this article, we will discuss how you should choose luxury home builders in Perth.

Recommendations and References

Start by getting recommendations and have a list of few names so you can check if they match the criteria mentioned below and shortlist them. This can be done by asking friends, family members, homeowners in your new house’s neighbourhood and other people who’ve built a luxury home in your area. Once you’ve shortlisted the candidates, check out their references and project portfolio. You can also visit the luxury homes that they’ve completed in order to get a sense of their style and quality of their work. Additionally, you can get in touch with their customers and find out about their experience with the contractor. Ask specific questions such as : Would you hire this contractor again to build a second home? Did they satisfactorily deliver on build quality?

Check the Level of Experience

One of the most important factors to consider when choosing a luxury home builder is their experience in the industry. A company that’s been in the business for a long amount of time can perform well on your expectations. With ample experience, comes invaluable insights into the finer aspects of building a home. Nevertheless, luxury homes usually incorporate unconventional design aspects. A builder with decades of experience knows the practical applications of such design elements and hence can give you a house that is sumptuous yet very pragmatic.

Time Management

Find a builder who’s known to be organised. When it comes to building a luxury home, there are multiple moving parts and these projects generally take longer to complete. It is, thus, necessary to choose a builder who’s able to successfully undertake the planning, scheduling, and organising the whole process on time. No one wants their home to take longer to build and continue living in a temporary accommodation.

Talk to the Builder

Once you’ve finalised your builder, have a detailed discussion with them. Make sure you feel comfortable with them and they’re on the same page as you. Ask them questions about every aspect of the project, including:

What are the options for personalization and customization for features of the house?

How do you handle change orders during the building process?

Do you ensure that the home will be healthy, free of toxins and eco-friendly?

Do you possess a valid license, general liability and damage insurance, bond and written warranty?

Can you furnish a proper contract with all the terms mentioned clearly?

Buying your first home is not only a big moment in life, it is also a demanding process that requires a lot of work and effort to be put in it. From procuring finance to choosing a neighborhood, building or buying a home, taking care of documentation and finally moving in, it’s a multi-step process. It’s not an easy task for people who can’t invest much time in this process due to their jobs and family responsibilities. Moreover, first home buyers do not have any experience in any of this. Thus, it helps immensely to have someone by your side through each step of the journey. Professional help can not only make the whole process seamless and smooth, it can also ensure that everything is done in the right way. We, at Escape the Rent, help you with everything related to buying your first home. We have a well laid-out system to help homebuyers, divided in four steps:

Acquire Finance

The first step on your way to home buying is comprehending and securing finance. This is a significant part that can often become complex. Consulting with a mortgage expert in the initial phase can help you understand exactly what amount you can afford to borrow and from where. There are many other factors to consider such as whether or not you’re eligible for First Home Owners Grant from the government, what type of loan would suit you best, the amount of deposit you can put down, etc. First home owners in Perth might be eligible to claim a $2,000 Home Buyers Assistance Account as well. A finance expert can guide you on all these aspects and help you procure finance most suitable for you. Additionally, the 2021-22 Federal Budget stated that you can now pay just 5% Deposit on your Home Loan with the Government's First Home Loan Deposit Scheme from 1 July 2021 to 30 June 2022.

Finding a Neighborhoods

This is another important step as it decides not only the location of your first home, but also the community that you’d be living in. Whether you desire living by the coast close to Perth’s immaculate beaches, or you love living in vibrant urban neighborhoods, we can help you find the perfect location for your home.

Buying/Building your Home

The next step is to choose the kind of home that you want for your family. Buying a newly completed home/apartment or building a project home/a custom home are some of your options. Whatever you choose, we can help you buy your dream home to the highest of standards.

Contracts, Permissions and Settlements

Cost Consideration

Firstly, you should know your budget before you start looking for house and land packages. This helps you save time as you only look for homes that suit your budget. Secondly, make sure that the cost of your land package is transparent. Find out whether you’re getting an all-inclusive quote for the house and land package or you’re falling for bait advertising. You will often see builders advertising house and land packages for an attractive price tag, but later reveal extra hidden costs like stamp duty, fixtures, fencing, connections, flooring etc. which shoot up the price of the house. Thus, choosing a fixed price of the package is advisable. You could also go for a turn-key package, which is complete with furniture, appliances and everything else needed to move in the house. Additionally, make sure that you get a detailed breakdown of the cost along with additional costs and customisations.

Time Taken For Construction

An important factor for choosing a house and package is the time your builder takes to construct your house. You should go with an experienced and trusted company to ensure that your home construction doesn't get delayed. Researching about reliable builders in Perth can help you find one who delivers on your expectations. Thus, you should get a proper timeline of the construction process and ensure that the builder sticks to it. Moreover, anticipate the delays in construction such as obtaining permits so you can account for those. Lastly, getting a construction timeline in writing from the builder can help you avoid disputes in the future.

Designs and Customisations

Most builders will provide you a catalogue consisting of various house and land packages with a number of designs and configurations that you can choose. It’s important to discuss with the builder about the design that you want and the scope of customisation available beforehand. This is important in order to get the perfect house for your family. Consider the things you need such as an extra space for an office or a gym. Make sure that your designs are flexible enough to accommodate any changes that you might want in the future. It’s a good idea to visit the display homes of builders so you can get a good idea of what you want in the home design and how it can be translated to reality.

Quality

Size of Loan and Deposit

The loan to value ratio, or LVR, is the percentage of the loan amount against the actual value of the property that you’re purchasing. While an LVR of 80% or less is generally considered low risk by lenders, an LVR above 80% is considered risky by lenders. In the latter case, you will have to pay Lenders Mortgage Insurance (LMI). In other words, you would also have to pay LMI if you have less than a 20% deposit. LMI is a premium that gives a protection layer to the lender against a potential loss in case you aren’t able to repay your loan.

Type of Home Loan

The choice of your home loan should be based on the reason why you need the loan. For instance,

if you need a loan to build a home, you should be looking at construction loans

if you have a low deposit, you should go for low deposit home loans

if you’re buying your first ever home, first home buyer loans should be your choice

if you have bad credit, you can look at bad credit home loan options

Interest Rate

You need to make a choice between fixed or variable loans. A fixed-rate home loan carries a specified interest rate for up to five years. In these loans, budgeting becomes easy since you know exactly the amount of repayments. These, however, offer less flexibility. A variable rate home loan carries a fluctuating interest rate; it depends on the current interest rate in the market. Here, your repayments can increase or decrease according to the market interest rate.

Fees

It is important to understand what fees are charged on the loan before you sign up for one. The fees include but are not limited to:

Application fees (one-off fee paid while applying)

Property valuation fees

Ongoing fees such as annual fees (for upkeep of loan)

Late payment fee (default fee)

Stamp duty

Discharge fee (charged when your mortgage is paid out in full)

Break fees (for switching loans during a fixed rate term)

Lender’s Mortgage Insurance (LMI) (if there’s a small deposit on your loan)

Features

You must also consider the features that different loans offer. These features include: The option of making extra repayments

The option of making lump sum repayments

The option to split the loan between fixed and variable

The option to get home loan pre-approval

A redraw facility that allows you to access any extra repayments you’ve made

An offset account that allows you to put money into another account, thus reducing the balance on which the interest is calculated

Repayment holidays that allow you to not make repayments on your home loan for a set period.

The process of building a luxury home is a distinctive experience. Everything including the house design, procuring the materials, and the interiors are done in a way that’s unique to a luxury house. Someone who’s willing to invest in an upscale house has to pay attention to every detail to ensure that the result is as desired. As Hubert de Givenchy famously put, “Luxury is in each detail”. Thus, it’s important to choose the right builder who can deliver exactly the house you want, especially if you want a plush home. In this article, we will discuss how you should choose luxury home builders in Perth.

Recommendations and References

Start by getting recommendations and have a list of few names so you can check if they match the criteria mentioned below and shortlist them. This can be done by asking friends, family members, homeowners in your new house’s neighbourhood and other people who’ve built a luxury home in your area. Once you’ve shortlisted the candidates, check out their references and project portfolio. You can also visit the luxury homes that they’ve completed in order to get a sense of their style and quality of their work. Additionally, you can get in touch with their customers and find out about their experience with the contractor. Ask specific questions such as : Would you hire this contractor again to build a second home? Did they satisfactorily deliver on build quality?

Check the Level of Experience

One of the most important factors to consider when choosing a luxury home builder is their experience in the industry. A company that’s been in the business for a long amount of time can perform well on your expectations. With ample experience, comes invaluable insights into the finer aspects of building a home. Nevertheless, luxury homes usually incorporate unconventional design aspects. A builder with decades of experience knows the practical applications of such design elements and hence can give you a house that is sumptuous yet very pragmatic.

Time Management

Find a builder who’s known to be organised. When it comes to building a luxury home, there are multiple moving parts and these projects generally take longer to complete. It is, thus, necessary to choose a builder who’s able to successfully undertake the planning, scheduling, and organising the whole process on time. No one wants their home to take longer to build and continue living in a temporary accommodation.

Talk to the Builder

Once you’ve finalised your builder, have a detailed discussion with them. Make sure you feel comfortable with them and they’re on the same page as you. Ask them questions about every aspect of the project, including:

What are the options for personalization and customization for features of the house?

How do you handle change orders during the building process?

Do you ensure that the home will be healthy, free of toxins and eco-friendly?

Do you possess a valid license, general liability and damage insurance, bond and written warranty?

Can you furnish a proper contract with all the terms mentioned clearly?

Size of Loan and Deposit

The loan to value ratio, or LVR, is the percentage of the loan amount against the actual value of the property that you’re purchasing. While an LVR of 80% or less is generally considered low risk by lenders, an LVR above 80% is considered risky by lenders. In the latter case, you will have to pay Lenders Mortgage Insurance (LMI). In other words, you would also have to pay LMI if you have less than a 20% deposit. LMI is a premium that gives a protection layer to the lender against a potential loss in case you aren’t able to repay your loan.

Type of Home Loan

The choice of your home loan should be based on the reason why you need the loan. For instance,

if you need a loan to build a home, you should be looking at construction loans

if you have a low deposit, you should go for low deposit home loans

if you’re buying your first ever home, first home buyer loans should be your choice

if you have bad credit, you can look at bad credit home loan options

Interest Rate

You need to make a choice between fixed or variable loans. A fixed-rate home loan carries a specified interest rate for up to five years. In these loans, budgeting becomes easy since you know exactly the amount of repayments. These, however, offer less flexibility. A variable rate home loan carries a fluctuating interest rate; it depends on the current interest rate in the market. Here, your repayments can increase or decrease according to the market interest rate.

Fees

It is important to understand what fees are charged on the loan before you sign up for one. The fees include but are not limited to:

Application fees (one-off fee paid while applying)

Property valuation fees

Ongoing fees such as annual fees (for upkeep of loan)

Late payment fee (default fee)

Stamp duty

Discharge fee (charged when your mortgage is paid out in full)

Break fees (for switching loans during a fixed rate term)

Lender’s Mortgage Insurance (LMI) (if there’s a small deposit on your loan)

Features

You must also consider the features that different loans offer. These features include: The option of making extra repayments

The option of making lump sum repayments

The option to split the loan between fixed and variable

The option to get home loan pre-approval

A redraw facility that allows you to access any extra repayments you’ve made

An offset account that allows you to put money into another account, thus reducing the balance on which the interest is calculated

Repayment holidays that allow you to not make repayments on your home loan for a set period.

A home design is a comprehensive design plan that combines the elements of architectural design and interior design for a home. It presents a complete picture of a future house that would be built on a particular piece of land. A home design typically includes floor plans, structural details, interior inclusions, pictures and everything that you need to know about your future house. When one decides to build their own house instead of buying an apartment or a pre-constructed house, home designs become an important factor in the process. Home designs offer the buyer a way to decide how they want their future house to be. They can choose from a number of home designs provided to them by their builder. In this article, we will discuss tips on how to choose unique affordable home designs In Perth WA.

Consider your block

The first step is to know your lot’s dimensions. The knowledge of your block’s measurements and allowable building area enables you to easily sort through potential home designs. For example, a long, rectangular lot with a small width will go well with narrow home designs. The ideal design should maximize flow and allow ample sunlight while also maintaining a sleek shape. This will allow you to have a vision of how your home will sit on the block and make sure that your home design fits.

Family and lifestyle needs

At times, people get swayed away by beautiful home designs and forget about what they really need in their home. It is important that you imagine your family living in the house and choose a house design that suits your family’s lifestyle needs. For example, if you love entertaining people, you might want a large open plan living room and an outdoor seating area.

Important features

Your family should sit together and plan about your future house by making a list of important features that you ended in your new home. Do you need an office space? Do you need an open plan kitchen so you can cook and talk to your family? Would you like a single story house or a double story one? One way to ascertain what you like is to visit display homes and note the features that stand out to you. After you’ve determined what you want and what you don’t, give this list to your builder and ask them for house designs that match those requirements.

Functionalities

Size of Loan and Deposit

The loan to value ratio, or LVR, is the percentage of the loan amount against the actual value of the property that you’re purchasing. While an LVR of 80% or less is generally considered low risk by lenders, an LVR above 80% is considered risky by lenders. In the latter case, you will have to pay Lenders Mortgage Insurance (LMI). In other words, you would also have to pay LMI if you have less than a 20% deposit. LMI is a premium that gives a protection layer to the lender against a potential loss in case you aren’t able to repay your loan.

Type of Home Loan

The choice of your home loan should be based on the reason why you need the loan. For instance,

if you need a loan to build a home, you should be looking at construction loans

if you have a low deposit, you should go for low deposit home loans

if you’re buying your first ever home, first home buyer loans should be your choice

if you have bad credit, you can look at bad credit home loan options

Interest Rate

You need to make a choice between fixed or variable loans. A fixed-rate home loan carries a specified interest rate for up to five years. In these loans, budgeting becomes easy since you know exactly the amount of repayments. These, however, offer less flexibility. A variable rate home loan carries a fluctuating interest rate; it depends on the current interest rate in the market. Here, your repayments can increase or decrease according to the market interest rate.

Fees

It is important to understand what fees are charged on the loan before you sign up for one. The fees include but are not limited to:

Application fees (one-off fee paid while applying)

Property valuation fees

Ongoing fees such as annual fees (for upkeep of loan)

Late payment fee (default fee)

Stamp duty

Discharge fee (charged when your mortgage is paid out in full)

Break fees (for switching loans during a fixed rate term)

Lender’s Mortgage Insurance (LMI) (if there’s a small deposit on your loan)

Features

You must also consider the features that different loans offer. These features include: The option of making extra repayments

The option of making lump sum repayments

The option to split the loan between fixed and variable

The option to get home loan pre-approval

A redraw facility that allows you to access any extra repayments you’ve made

An offset account that allows you to put money into another account, thus reducing the balance on which the interest is calculated

Repayment holidays that allow you to not make repayments on your home loan for a set period.

Using the First Home Owner Grant as Deposit

Let’s start with the first Home Owner Grant (FHOG) by the government. You can use your FHOG for a part of your deposit. Nevertheless, you will still have to account for other upfront costs of purchasing a home, such as brokerage, legal fees and moving expenses. If you purchase a brand new house or a completely renovated one, the FHOG is normally paid on settlement. On the other hand, if you build a new house, the FHOG is typically paid when you make your first payment on the loan. Moreover, every state and territory has different requirements for FHOG, whereas some states offer FHOG only to people buying new homes. So make sure you check the requirements of your state and account for other expenses from your FHOG. You might also qualify for Keystart Finance as a first home buyer, which means you will only need a 2% deposit.

Basic Criteria for Low Deposit Home Loans

There are different low deposit loans available for first time home buyers. These have different conditions and borrowing criteria. But as a general rule of thumb, you need minimum savings of 5%-10% of the total purchase price in case of low deposit home loans.

There are other options to make securing your home loan easier. For instance, some leaders allow borrowing to the tune of 105% of the property value with a guarantor loan and 95% of the property value without a guarantor. Moreover, if you have a guarantor, you would normally not need a deposit. If your parents own their home and want to guarantee a part of your deposit, they could be your guarantor. Besides, if their guarantee is worth more than 20% of your home’s value, you may also be able to avoid paying lenders mortgage insurance. Additionally, you can also use a gift or an advance from your parents as your deposit.

How to Get a Low Deposit Loan as a First Home Buyer