If you’re a first home buyer in Melbourne, you’re likely seeking information on finance options and government grants you may be eligible for. Buying your first home is an exciting time, but it can also be confusing for first timers.
This article is a helpful guide for first-time home buyers in Melbourne. You’ll learn about the grants available to first home buyers in Melbourne, the basics of getting a home loan, and how to get fast home loan pre-approval with Lend & Co.
- What grants can first home buyers get in Melbourne?
- The basics of getting a home loan
- Getting Fast Home Loan Pre-Approval in Melbourne
Grants for First Home Buyers in Melbourne
Let’s look at some grants and concessions you may be eligible for as a first time home buyer.
1. First Home Owners’ Grant
This is a government grant to the value of $10,000. The First Home Owners’ Grant (FHOG) is available when you build or buy your first home. Eligible properties include a stand-alone house, a townhouse, or an apartment. Investment properties and holiday homes don’t qualify.
There’s a ceiling on the price of the home. The grant is only available for properties that cost $750,000 or less. You must be over 18 and occupy the home as your principal place of residence to receive the grant.
To check your eligibility and for full details, visit the State Revenue Office Victoria website: https://www.sro.vic.gov.au/first-home-owner.
2. First home buyer stamp duty exemption
All home purchases in Melbourne attract a stamp duty tax. However, as a first home buyer, you are exempt and don’t have to pay any stamp duty.
The property must be $600,000 or less to qualify for the stamp duty exemption. This will save you over $30,000. If the property is above this price but no higher than $750,000, then you’ll pay stamp duty on a sliding scale dependent on the property’s price.
To estimate how much stamp duty you might pay, use the Land Transfer Duty Calculator on the State Revenue Office Victoria website: https://www.sro.vic.gov.au/calculators/land-transfer-calculator.
3. First Home Guarantee
This is a Federal Government scheme that offsets the deposit for your first home. As most lenders require a deposit of 20%, the Federal Government is offering to cover 15% of the deposit, leaving you to come up with only 5%.
Home Loan Basics
When you’ve found your dream home, it’s time to arrange your mortgage. There are many banks and lenders to choose from, along with a variety of home loan types. An initial place to start is to do some preliminary number crunching yourself with some of our very useful calculators. These calculators help you to estimate things like your borrowing power, loan repayments and more.
Types of home loans
Variable rate home loan: With this type of loan, the interest rate fluctuates according to your lender, market conditions, and the interest rate set by the RBA.
Fixed rate home loan: This home loan allows you to lock in a fixed rate of interest for 1 to 5 years.
Basic home loan: This is a simple, no frills home loan. Typically, they are low interest, low fee, variable rate home loans with little to no other features.
Split rate home loan: Similar to the fixed rate loan, this home loan allows you to take out part of your loan on a variable interest rate, and the other portion on a fixed rate. Typical splits are 60:40 or 75:25.
The home loan application process
The process of applying for a home loan can be lengthy, and can seem a little complicated. Here are the common steps we help with:
- Completing all the required documents
- Comparing lenders current home loans and rates for the most suitable ones
- Submitting your documents for a preliminary assessment with the lender we think is most appropriate for you
- If you meet their criteria, we will lodge your full application
- If not, we’ll start the process again with another lender
- The lender undertakes a property evaluation and makes a decision on your application
- They send you an offer – which includes rates and terms
- Once agreed by both parties, the funds are made available to your solicitor or conveyancer on settlement day to complete the payments.
Home loan requirements
It’s useful to understand what lenders are looking for when it comes to home loans for first time buyers. This will help you to determine if you are ready or have more to do. Here’s what a lender typically wants:
- A deposit of at least 20% (or 5% plus a 15% subsidy from the First Home Guarantee scheme)
- A good credit score and credit history
- A stable income
- No or low debts
- Photo ID
- Payslips and bank statements
- Other documents such as the First Home Buyer Grant
Fast Home Loan Pre-Approval in Melbourne with Lend & Co
If you are looking to purchase your first home in Melbourne, we’re here to help. We can even help with the home loan pre-approval process, so you can start shopping for a home sooner. Once you find a home, we can help you with applying for grants or subsidies and with submitting your home loan application. Contact us today and discover how we can assist you.
