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February 8, 2023 | IN AVIDConnect | BY AVID | 5 min read

One of the first decisions to make when looking for your new home is how much you’ll need to budget for – and the best way to do this is to get ‘finance-ready’.

Whether this is your first home, or it’s been a while since you last bought a property, we’ve put together some steps to help get you started.

Step one

Choose a broker or finance institution, and book an appointment

You may have a pre-existing relationship with a bank or want to shop around and find competitive rates – either way, the first step is to decide whether you’ll go direct to a bank or use a mortgage broker.

There can be benefits of going with a finance institution you already bank with – you’ve likely got a track record and understand their customer service. On the other hand, a mortgage broker will be able to compare different banks and loans and do a lot of the running around for you.

Most mortgage brokers don’t charge you for their service, as they are paid either a commission or a set fee direct from your selected lender.

If you’re looking for a broker to help you here are some tips on how to choose one.

Firstly, ask family or friends for recommendations and then choose a mortgage broker who is:

• Registered with ASIC. They should either hold a licence or be a credit representative, and you can check ASIC’s register
• A member of an industry association that monitors legislation and sets code of practice such as the Finance Brokers Association of Australia (FBAA) or Mortgage and Finance Association of Australia (MFAA).
• A member of an external dispute resolution scheme to safeguard you if you’re not happy with the service you received.

Ask your broker:

• How many lenders they have relationships with – the more the better
• How long they have been a broker, and
• How their commission is structured and whether it varies from bank to bank – you should have transparency over this.

Step two

Check your credit report

You can apply for a free credit report from a consumer credit reporting agency every three months. This will give you an overview of your financial history, including any defaults and transactions, and importantly check for any mistakes that are recorded.

There are three main credit reporting agencies in Australia, each with their own reporting: illion, Equifax and Experian.

Having this information will help you with discussions with your financier or broker as the bank will use it to assess your loan. The selected lender will also be able to undertake your credit history on your behalf if, required.

Step three

Discover your eligibility for any government grants or reduced taxes and fees

Ask the question of your financier or mortgage broker or head to the respective state and federal government sites to see if you are eligible for any grants.

In addition to the Australian Government’s Home Guarantee Scheme, first time buyers may also benefit from a number of state initiatives including First Home Owner Grants.

Victorian first home buyers, who choose to build, may be eligible to receive First home buyer duty concession, offering lower fees on costs such as stamp duty, whilst the Homebuyer Fund may assist those wishing to place a smaller deposit.

Residents in New South Wales can explore the benefits of the First Home Buyer Assistance Scheme and the First Home Buyer Choice, which provides certain concessions on stamp duty payments.

First home buyers from Queensland, may also benefit from reduced fees on stamp duty, through state based schemes, including the First home vacant land concession.

Step four

Get pre-approval

Some pre-approved loans can be obtained relatively quickly, subject to having the necessary lender required paperwork ready. Pre-approved loans will have specific conditions attached and is not a guaranteed loan. It will, however, help you narrow down your price range and give you a good idea of how much you can spend on your new home. Your mortgage broker or lender will be able to guide you through the loans process.

It means that, when you’re getting ready to buy, in the relaxed address of Harmony,  the tranquil surrounds of Covella, the nature inspired Brentwood Forest, the elegance at Waterford, the peace and happiness at Carolina,  the sanctuary of Amara, or the brilliantly connected Chambers Ridge,  you will be as financially prepared as possible to secure your dream home.

If you’re considering buying or building your new home at one of our communities, our dedicated sales consultants will assist you with any queries and provide information that’s relevant to you and your needs.

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Disclaimer

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Although every effort has been made to verify the accuracy of the information contained in this website, AVID, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained on this website or any loss or damage suffered by any person directly or indirectly through relying on this information. AVID recommends you consider whether it is appropriate for you and that you seek your own independent advice before acting on this information or making any commitment of a legal or financial nature. Buyers may be eligible to participate in the Australian Government’s Regional First Home Buyer Guarantee or state government’s First Home Owner Grant. Not an AVID promotion. Eligibility and date restrictions apply. AVID does not accept any liability with regard to these schemes. See http://firsthome.gov.au and https://www.nhfic.gov.au/ for more information and full terms and conditions.