Research what you can save on 

As a first-time buyer, there are a few exemptions and incentives that you may be eligible for that could save you a considerable amount of money. Examples include the First Home Owner Grant and Stamp Duty. 

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The First Home Owner Grant: Kicking off in mid-2000, the (FHOG) programme is a national government scheme that aims to offset the effect of goods and services tax (GST) on homeownership. As a first-time buyer, you’ll need to prove eligibility and meet specific criteria. If successful, you can receive a one-off grant of $10,000, and even more if you are buying a house in regional Victoria. 

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Stamp Duty: With land for sale in Clyde North, house and land packages are becoming increasingly popular. They also come with the potential for reduced stamp duty. Developers typically require a 10 per cent deposit when buying land, but when you buy a house and land package you only have to pay stamp duty on the purchase of the land itself, saving you a lot of money. If you’re a first-time homebuyer that intends to live in the property, you may be exempt from stamp duty altogether provided the home is below $600,000 and you live in it for twelve months. 

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Assess all the extra costs 

Buying a house is likely one of the largest purchases you’ll ever make. While the cost of the house can seem daunting, it’s important to factor in other potential charges that can quickly eat away at your deposit. Stamp duty may come into play if you don’t plan on living in the property, this can be a hefty expense that needs to be budgeted for. Stamp duty rates vary depending on the price of your property. Other costs may include Lenders Mortgage Insurance (LMI), transfer fees and conveyancing and solicitor fees. Do your homework, speak to people who have been through the process before so you aren’t getting any nasty surprises down the road. 

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A 20% deposit may be a better, long term option 

While a 5-10% deposit is often an acceptable figure for first-time buyers, it does mean that you’ll have to pay Lenders Mortgage Insurance (LMI) if it’s under 20%. LMI is calculated as a percentage of the loan amount and protects the lender, not you. If you are unable to make your repayments, LMI covers the lender in the event that the outstanding loan balance cannot be paid. Putting down a 20% deposit can result in lower repayments over a shorter period of time and allows you to avoid the added expense of LMI. However, not everyone is in a position to save 20%, do the numbers and see what option is better for you. 

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Don’t borrow more than you can afford 

Some financial institutions can offer to lend a significant amount of money. While this can feel exciting at first, it could become a financial nightmare down the road if you borrow more than you can comfortably afford. You often hear of people getting carried away with the thrill of having an expensive new home, only to lose it down the line. 

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Make sure you know your budget inside out and plan accordingly for future repayments, changes in circumstances etc, so you have a true forecast of what each week or month will look like. Speaking to a reputable mortgage broker is also a great way to get guidance and a true understanding of what you can afford to borrow. 

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Know the difference between buying at auction and a standard offer

You might see the home of your dreams go up for auction, but be wary that once you’ve agreed to buy it, there are no get-out clauses like there are in a standard conditional offer. In a standard conditional offer, there is wiggle room to change your mind if any issues occur. When buying at auction, if your finance doesn’t get approved or there are building defects in the property, there’s not much you can do about it. This can be a risky, expensive option for first-time buyers if they haven’t done their research properly. A house and land package can be a safer choice as you can work side-by-side with your builder as your dream home comes to life. 

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Interested in inquiring about land for sale in Clyde North? Our team would love to help, get in touch with us to discuss our house and land packages today. 

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