Getting a Home Loan in Australia if you're living overs...
29 Nov 2023
Buying a home is a big financial commitment, so it is only natural that you want to find the perfect house for you and your family.
When attending open homes or searching the internet, it is essential to have a list of your ‘must haves’ - the desirable items you want the home to include e.g. separate study, large alfresco, etc. Not only this, but you should have a budget/maximum purchase price in mind as well as pre-approval.
Your perfect home may come along at any time, so be prepared.
Here are some helpful tips to consider on how to find the right house for you.
When searching for your dream home, it is important to consider the pros and cons of the property, as well as making sure it ticks all your boxes.
Below is a checklist of some factors to keep in mind when house hunting.
It is all about location, location, location.
Consider how your social, family, and work life will fit in to the location you decide to purchase in. Ask yourself the following:
Are you after a 4 bedroom 2 bathroom home? Do you want a low maintenance home? Do you need a home with a separate, quiet study? Is a swimming pool a non-negotiable?
The size and floorplan of the property will come down to your current circumstance, and whether you plan on growing your family in the future.
If you are attending inspections, confirm whether the appliances in the home work to standard. Check the following, or ask the estate agent:
Natural light is important - it can change the aesthetic appeal of a home, making rooms feel more comfortable, cozy, and open.
If you can, see if the house is north-facing to take advantage of the sun throughout the day and also ensure it has plenty of windows.
When attending inspections, don’t forget to talk with the real estate agent about the property. You may open yourself up to some insights you did not realise when walking around the property.
Here are the key questions to ask:
On top of your deposit and the purchase price, there are a number of upfront costs to buying a home you need to consider.
The costs include legal and conveyancing fees, stamp duty, building and pest inspections, and a valuation. If you do not have a deposit of 20% of the home’s value or more, you will also need to pay Lenders Mortgage Insurance (LMI) which is a one-off cost that is added to your home loan.
When embarking on the journey to become a homeowner, it is crucial to establish practical financial objectives. Purchasing a house beyond your financial capacity can lead to long-term difficulties when you have to repay your loan.
Are you planning to buy a house on your own or with someone else? How much money have you saved for a deposit? What do your earnings and expenses look like?
It is also essential to research all the expenses associated with buying your first home, including stamp duty, lender's mortgage insurance, property valuation, and conveyancing. Your earnings and living expenses will determine the amount you can borrow for a house and the sum you can afford to pay for a property. Understanding what you can afford will help you narrow down your search and avoid wasting time on properties that are beyond your budget.
With the help of our borrowing power calculator, you can obtain an accurate estimate tailored to your specific circumstances. Calculating your borrowing power takes less than three minutes! Enter your earnings and expenses to estimate the amount you may be able to borrow for a home loan.
There are several government assistance programs which can significantly lower the out-of-pocket expenses of buying property, such as:
First Home Owners grants: A one-off payment which is usually paid at the time of settlement to your home lender. Varies from $10,000 to $30,000 depending on the state/territory you reside in.
First Home Loan Super Saver Scheme: Eligible first home buyers applying for a home loan can make voluntary concessional (taxed at a discounted rate of 15%) and non-concessional contributions to their superannuation fund to help them save for a home.
First Home Guarantee Scheme: First home buyers can purchase a home with a deposit as low as 5%, without the need to pay LMI. The FHG exists alongside the Regional First Home Buyer Guarantee and the Family Home Guarantee.
Once you find your dream home and move in, there will be ongoing costs such as your mortgage, water and council rates, home and contents insurance, electricity, gas, regular maintenance/repairs, and strata/body corporate (largely applies to apartments, units, and townhouses).
Choosing the right home loan is almost as important as your choice of property. A good value home loan can save you hundreds of thousands of dollars over the life of the loan. The terms and conditions of your home loan will also impact your future financial commitments. Factors such as interest rates, repayment frequency, and loan terms will determine how much you need to pay back to your lender, and over what period. Therefore, it's important to choose a home loan that suits your financial needs and goals.
To help identify what type of property is right for you, here are a few options to think about.
Purchasing an established home can alleviate the difficulties associated with building and allow you to peruse available properties online until you discover one that meets your needs. Furthermore, buying a pre-existing home grants you the freedom to select your preferred location without being limited by the property's size or type. This translates to a broader range of availability and choice when it comes to choosing a home.
However, with an established home you’re unable to tailor the home exactly how you want it (up to a certain point). Furthermore, established homes may require more maintenance and repairs, which could result in additional expenses for the homeowner e.g. structural damage that went unnoticed.
Looking to buy your own block of land and design your home? A house and land package may be the right option.
These packages are commonly found in new suburban or estate developments, where land is typically more affordable. In addition, house and land packages may offer comprehensive "turnkey" deals that include all the desired features such as driveways and landscaped gardens. The home will be fully prepared for the buyer to move in with just a turn of the key.
Building a new home can also help you reduce the costs associated with stamp duty since you only pay for it on the land and not the property itself.
There are some potential downsides, such as the lot sizes (usually 400sqm or less) and the location - majority of developments are located on the outskirts of the city.
If proximity to the CBD is a priority for you, choosing to live in an apartment or unit may be a suitable option. These types of dwellings are typically more reasonably priced than houses and usually require less upkeep, such as mowing lawns, cleaning gutters, and tending to gardens.
It is advisable to factor in quarterly body corporate fees, which cover the maintenance expenses for the complex, as it can be quite hefty.
A townhouse can provide the ideal combination of affordability and spaciousness, with more room than an apartment but at a lower cost than a house. Some townhouses may include an outdoor terrace or courtyard, allowing for enjoyable alfresco living.
Purchasing a townhouse is an excellent option for those seeking the seclusion of a house while avoiding the communal atmosphere of an apartment. Townhouses typically do not have shared areas such as hallways or lobbies, providing greater privacy.
However, you will be required to pay body corporate fees every quarter.
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.