Being a first home buyer in 2024 is daunting. Property prices around the country have seen significant growth, despite 13 recent rate rises. And with the property market expected to go on climbing, first home buyers are more eager than ever to get a foot on the property ladder.
According to Canstar, 9 out of 10 first home buyers are now willing to make compromises so they can buy sooner. These compromises include drastically reducing spending, buying an older property or downgrading to an apartment instead of a house.
But buying your first home doesn’t have to be all about compromise. In this First Home Buyer Guide, we’ve included some helpful home buying tips tailored for the first home buyer. Being informed about loan options, stamp duty and first home buyer schemes could help you buy your first home sooner, and with fewer compromises.
Tip #1: Find the Right First Home Buyer Loan
As a first home buyer, there are several key things to keep in mind when applying for a first home buyer loan. These include:
- Interest rates: Look for a first home buyer loan with a competitive interest rate. You’ll also need to consider whether you want a fixed or variable rate.
- Loan terms: These may include the length of the loan and whether it includes any regular fees or added charges.
- Loan features: The right features could help you achieve future financial goals. For example, you might include an offset account or a redraw facility.
- Deposit requirements: The size of your deposit will depend on your eligibility for a first home buyer grant, your preferred lender and whether you’re willing to pay Lenders Mortgage Insurance (LMI).
For expert assistance in choosing the right first home buyer loan, talk to an experienced mortgage broker.
Tip # 2: Understand First Home Buyer Stamp Duty
Many people confess to being confused by first home buyer stamp duty. The most common question is: Do you have to pay first home buyer stamp duty?
As a first home buyer in Queensland, you may be eligible for a concession on stamp duty, if:
- You’re a legitimate first home buyer.
- You’ll live in the property for at least 1 year.
- The property costs less than $550,000.
If the property price is less than $500,000, the first home buyer stamp duty concession will remove all transfer costs (so you won’t have to pay a thing!). If it costs between $500,001 and $550,000, you will be charged some stamp duty, but at a significantly reduced rate.
Tip #3: Research First Home Buyer Schemes
Eligibility for a first home buyer scheme in 2024 could make it possible for you to buy a property sooner:
- First Home Super Saver: This first home buyer scheme allows you to make voluntary contributions to your superannuation and then redraw the funds to use as a deposit.
- First Home Guarantee: As an eligible first home buyer, this guarantee allows you to buy a home with only a 5% deposit. Because the government guarantees the remaining 15%, you won’t be charged LMI.
- Regional Home Guarantee: This scheme is open to anyone who hasn’t owned a property in the preceding 10 years (including a first home buyer). It allows you to build or buy a new home in a regional area with only a 5% deposit, without having to pay LMI.
- First Home Buyer Grant: This federal initiative can be an enormous help to a first home buyer. In Queensland, the First Home Buyer Grant recently doubled to $30,000 and can be used for building/buying a new home up to $750,000.
Tip #4: Talk to a Mortgage Broker
Applying for a first home buyer loan is challenging. But it’s not something you have to do on your own. At SCF Solutions, our brokers have a broad range of industry experience and in-depth knowledge of current market trends. This means we can answer your questions, provide tailored home buying tips and help you find the right first home buyer loan.
To start your home buying journey, book an appointment with SCF Solutions today.