How much can you afford to borrow?
What does your dream home look like?
What should you be looking for in a new home?
Saving for a deposit
What boosts and grants are you entitled to?
Choosing your home loan
Fixed versus Variable
Applying for a Home Loan
Insuring your new home
At Heritage we're committed to putting People first and we know the first thing many people want is a place of their own. We're in the business of making your dream a reality.
Opening the door to your new home is one of the most exciting days of your life, whether it's your first or fifth!
At Heritage we know how you feel. We also know there are a lot of important responsibilities that come with buying a property.
There's the home loan, the legal side of things to look after, change of address notices, removalists, new electricity and phone accounts.
It can be overwhelming. But Heritage can help.
All it takes is a little bit of planning and some help from your local Heritage Branch Manager.
How much can you afford to borrow?
It may seem obvious, but it's something you need to sit down and work out as accurately as you can before you start looking.
At Heritage we're all about putting People first. The last thing we want to see you do is over-commit yourself financially.
Lots of variables determine your borrowing power. The number one factor is usually your income. But your existing financial commitments, credit history and living expenses are also taken into account.
Don't stress. You don't need to be a maths whiz to see how much you can borrow. Just use our lending power calculator to give you an indication of how much you can borrow.
Getting pre-approval of your home loan gives you a lot more bargaining power when you find your dream home. You can then use this pre-approval amount as a guide to the amount you'll be able to borrow, and you're under absolutely no obligation to take the loan out.
What does your dream home look like?
People first applies to choosing your home too! It's all about choosing the right home for the people who are going to live there.
Does your idea of a dream home have two, three, four or more bedrooms? A double garage? A big backyard? Write a shopping list. It will save you a lot of time and will also help you get it clear in your mind exactly what's important to you. Be very clear about the things you won't compromise on as well as those you are more flexible about.
This will really help your real estate agent find the right places for you to inspect. When you are looking at these properties (and make sure you inspect a lot to get a good idea of the market), you can crosscheck them with your list.
Our Home Buyer's Checklist (pdf, 284KB) helps you keep track of all the features and inclusions of each property you view so you can crosscheck with your wish list.
What should you be looking for in a new home?
Buying a new home is an exciting time. But don't let your emotions overtake sound and proven advice. Be sure to have your list of ‘must haves' and the ‘nice to haves'.
- Is the property close to important amenities like public transport, schools, cafes, shops and parks?
- Is the area growing and desirable?
- Are there any developments you need to know about (e.g. new roads, property developments, railway stations)? Will these plans increase or decrease the value of your property? Check with the local council to find out.
- Do you plan to live in your new home for a short time or long-term? Can you renovate, or add value to the property if you need it?
Saving for a deposit
Saving for a deposit can be a challenge, but owning your own home is a great motivation to put money away. Heritage can help with our detailed Budget Planner.
Now you have a plan, check out our savings and investment accounts to see how you can reach that magical deposit amount.
What boosts & grants are you entitled to?
If you missed out on the government grants before 30 September 2009, all is not lost. Some of the first home buyer benefits are still available including the First Home Owner Grant (FHOG).
Find out if you're eligible. If you're buying an existing home and you do qualify, you'll receive the $7,000 government grant.
If you're ready to buy, Heritage can help you complete the paperwork and lodge your First Home Owner Grant application. There's plenty of other paperwork and documents coming your way so that's one less thing to worry about.
Choosing Your Home Loan
At Heritage, People first is the creed we do business by. Instead of making huge profits, we strive to offer our members very competitive home loans with low fees and low interest rates.
Suggested home loans
Our home loan comparison gives you a snapshot of Heritage loans and their features and benefits.
Fixed Versus Variable
There are benefits to both home loans but these are the main ones to consider:
Fixed home loans
Fixed is best if you like the certainty of knowing exactly what you need to pay and when. Interest rate rises don't apply to you during the period you've fixed your loan. Because your mortgage repayments are guaranteed, it's much easier to budget and plan ahead. Of course, if rates go down, you're locked into your fixed rate and won't enjoy the benefits of the lower rate.
Variable home loans
A variable loan doesn't provide that absolute certainty, but it is usually lower than the fixed loan rate. If interest rates go down, yours probably will too. If they rise, you can expect an increase. A great feature of a variable loan is you can take advantage of times when rates are lower. If you keep your repayments the same when interest rates decrease, you will then be in a position to be paying more off your loan.
Applying For A Home Loan
Be prepared with our application checklist
Our handy home loan checklist (pdf, 304KB) can help you save time and hassle by making sure you have all the documents you need when it's time to fill in your home loan application. Remember, this checklist is only a guideline. Not all of the points will necessarily apply to you. If you need more information, we're here to help you out.
What you need to know about Stamp Duty
Like conveyancing and search fees, Stamp Duty is one of the significant fees associated with buying property.
Stamp Duty is a State Government tax. The amount you pay depends on the State or Territory the property is in. The payable tax is a percentage of the amount you pay for the property.
The good news for first home buyers is that most Australian States and Territories offer Stamp Duty concessions as an incentive to most first home buyers.
Go to www.firsthome.gov.au for more information.
There's more than one kind of Stamp Duty
Depending on your circumstances, there may be more than one type of Stamp Duty payable. The Stamp Duty we talked about above is based on the property price. This is usually the highest cost associated with the purchase.
There is also Stamp Duty payable on the mortgage. Rates differ according to the State or Territory, and the value of the property.
Our Stamp Duty Calculator can help you find out what you're likely to have to pay.
What is Lenders Mortgage Insurance?
Lenders Mortgage Insurance is usually required if you have a deposit that is less than 20% of the value of the property. It also depends on the type of loan, type of property and the location.
Lenders Mortgage Insurance covers you if you default on the loan. If the property is sold at a price that does not cover the loan in full, the insurance covers the difference.
How Do You Make An Official Offer?
So you've found it! Your dream home. What's the next step?
Assuming it's a standard sale and not an auction, you need to put your offer in writing. Your real estate agent can help you with this. Now's also a good time to organise a conveyancer.
Stay calm and don't feel pressured to agree to any conditions you're not comfortable with. Also, don't be afraid to put in conditions you'd like. If you're not totally satisfied they've all been met, you don't have to go through with the purchase.
Common conditions include:
- subject to finance
- subject to pest and building inspection
- subject to title search
- subject to valuation report
Allow a minimum of 10 business days to make sure all of your conditions are met and the relevant reports, checks and valuations are done.
Advice For Buying At Auction
Rule number one - do your research. But don't be put off. An auction can be a great way to buy your new home. Just be aware that there are different legal requirements in each State and Territory.
If you're the highest bidder at an auction and your offer is accepted, there is no cooling off period. You must exchange contracts on the day and pay the 10% deposit.
If your offer is not accepted but you are the highest bidder, you have first rights to negotiate with the vendors.
Experts you need to know
These are the people we recommend you speak to before making your offer unconditional. Once your offer is unconditional you are legally bound to honour it.
- Your local Heritage Branch Manager to confirm your loan is approved
- Your solicitor to ensure all the conveyancing is in order
- Your insurance company to organise home insurance on your new property. Consider mortgage repayment insurance too
- A building and pest inspector to ensure everything is in order
Here's a list of inspections Heritage can recommend.
Inspections are essential
You're almost there. You've fallen in love with a place, and you want to make an offer, but it's important you don't rush into anything until you're confident everything is OK. Make sure you have a professional, independent building and pest inspection.
Building inspections cover issues like:
- Asbestos, rising damp, and other hazards
- Sub-floor ventilation and drainage
- Structural damage to the roof space
- Damage or problems with gutters, windows, foundations, cracks
- Doors, ceilings, plumbing, electrical wiring
- Extensions, renovations, additions that do not meet regulations
Pest inspections look out for things like:
- Existing or potential damage from all kinds of pests including white ants and termites
- The actual presence of pests, such as termites or white ants at the property
Strata inspections only apply to apartments and townhouses and they cover:
- Rules and regulations set out by the Body Corporate/Owner's Corporation
- Ongoing maintenance fees and any special levies payable
- History of disputes or claims against the current owners
- The balance in the administrative and sinking funds
- Whether the insurance cover for the building is adequate
What if an inspection uncovers a problem?
It's not necessarily all doom and gloom if the inspections discover something wrong. Unless it's something serious that you're not prepared to attempt to solve, you may be able to correct the problem. You could even renegotiate a lower price to offset the cost of repairs.
That's why it's so important to have these inspections. You don't want any nasty surprises after signing the unconditional contract.
Time To Go Unconditional
We're nearly there! Time to finish the paperwork, check the details and agree on a settlement date.
You need to let your real estate agent know you're going unconditional. It's a good idea to arrange a final inspection to check everything's in order at the property.
Signing The Contract
OK. The building and pest inspections are done and you're confident everything is fine. It's time to exchange contracts. You have to sign this document and exchange it with the vendor.
The contract officially details everything about the purchase of the property including the title, terms and conditions, property boundaries, sewerage plans and any inclusions that are part of the sale (curtains and light fittings for example).
Remember, the contract is legally binding. That's why you're paying a solicitor to handle the conveyancing and the legal side of things.
Settling On Your New Home
Settlement usually takes about six weeks. This gives your lender (hopefully its Heritage!) time to process your loan so it's ready for settlement. In some circumstances it can be less than six weeks if both parties agree.
You're almost there so now's a good time to start planning your move. This moving house guide (pdf, 274KB) is a huge help.
It's Settlement Day. Welcome Home!
Congratulations! You made it. You've been clever, persistent and patient. And it's been worth it. Enjoy your new home. You deserve it.
On settlement day it's a good idea to make one last inspection of the home just to make sure everything is in order. If you're satisfied, the only thing left to do is hand over the cheque with the balance owing (which your conveyancer will normally arrange) and take ownership of your new home.
Insuring Your New Home
Heritage puts People first with our insurance policies too. As soon as your home is settled, you should have it covered by insurance. Heritage home and contents insurance can provide complete cover and peace of mind from day one.
What kind of insurances do you need now you're a home owner?
The common two are:
Building insurance - covers the structure and fixtures of your home.
Contents insurance - covers your belongings including furniture, artworks and jewellery.
But you might also like to consider Mortgage Protection Cover. It's not a very pleasant subject, but for most of us our biggest financial commitment is our mortgage repayment. With a choice of disability, unemployment and/or death cover, Mortgage Protection Cover ensures your mortgage repayments are covered if you can't work.
What You Need To Know About Insurance
Like everything in life, you get what you pay for. Don't make the very common mistake of being under-insured. It's time very well spent to take a complete stocktake of your home's contents. You may be surprised at how much you own and how much it would cost to replace!
Consider things like shoes, clothes, soft furnishings, bedding, toys, cosmetics, perfumes, cookware and cutlery. Then estimate the full replacement cost of every item and insure for this amount.
Most policies ask you to list valuables that are worth over a certain amount like rugs, artworks and electrical goods. Be sure you list items like these with their dollar value so you can claim the full cost. If you don't, you may be limited to a set maximum dollar value per item if you ever had to make a claim.
Choose your contents policy carefully and be aware of exactly what it offers. For example, a replacement policy replaces older goods for new ones and an indemnity policy applies depreciation to your assets.