Mortgage broker Joondalup

First home buyers, deposits and the schemes

Almost every first home buyer arrives with the same question, which is how much deposit they really need. The honest answer is that it depends on the lender, the property and whether you qualify for any assistance.

Western Australia has a first home owner grant and a first home owner rate of duty for eligible buyers, and there are federal schemes as well. Thresholds and eligibility change, so we check the current rules against your numbers rather than quoting figures at you.

• What counts as genuine savings, which is not the same at every lender
• Whether lenders mortgage insurance applies at your deposit level
• Guarantor structures, where a parent's equity supports the deposit
• Federal and state assistance you may be eligible for
• Stamp duty and settlement costs, so nothing lands as a surprise
• What the repayment looks like if rates move against you

The other thing worth doing early is pre-approval. It replaces a guess about your borrowing power with a number, and it changes how a selling agent treats you.

House and land, and two contracts instead of one

A large amount of buying around Joondalup and further north is house and land rather than an established home. Structurally that is two purchases, and lenders treat it that way.

You settle the land first, then the build draws down in stages against the building contract. During construction you generally pay interest only on the amount drawn so far, which is lower than the full repayment.

1. 1

   Land settles on its own

   The land contract settles first, funded by your deposit and a land loan. Titles on newer estates can take longer than expected, so check the timing.

2. 2

   The build is approved against the contract

   The lender assesses the fixed-price building contract and plans, and values the finished house as if complete.

3. 3

   Progress payments follow the build

   Slab, frame, lock-up, fit-out and completion. The builder invoices, the lender inspects where required, and the funds are released.

4. 4

   Repayments step up at handover

   Once the last payment is drawn the loan converts to full principal and interest. Budget for that figure, not the interest-only one.

The trap is rent and repayments at the same time. You are paying interest on the drawn balance while still paying to live somewhere else, and a long build makes that period longer than the brochure suggests.

Provisional sums and variations are the other one. A contract with a lot left provisional gets a harder look from some lenders, and the extras usually come out of your pocket rather than the loan.

Investors, upgraders and the local business market

Joondalup is not only a first home buyer suburb. Established houses in the older parts attract investors, and there is a constant stream of families upgrading from their first place to something larger.

Upgraders face the sequencing problem rather than the deposit one. Buying and selling in the right order without owning two properties or none is the whole exercise, and it sometimes takes bridging finance.

• Home loans for first buyers, including low deposit and guarantor structures
• Construction finance for house-and-land and knock-down-rebuild
• Refinancing once equity has built up in the first property
• Investment lending assessed on the signed lease
• Commercial loans for local business premises around the city centre

Whichever of those it is, the process starts the same way. Fifteen minutes, your real numbers, and a straight answer about where you stand.