Buying your first home
When you’re considering buying your first home, there’s a lot more to think about than just the area you want to live in. If you’re saving for a deposit you might be able to access some of your super to help.
There are many things you need to consider in the process of buying – some obvious, some not. The first one is generally the deposit. We run through a few other considerations that will help you in the buying process.
What to know before you buy
Whether you’re purchasing an investment property or a new home – regardless if it’s on your own or with your partner – buying your first house is exciting and you should be proud that you’re taking this step. Before you head down this path, there are a few things to consider that will help make the process a little easier.
Consider all the financials
Try to get an understanding of all the costs that are associated with buying a house – beyond the actual price of the house. Keep in mind that when buying a house you’ll most likely need to pay for a conveyancer, solicitor, transfer and government fees, and potentially a building and pest inspection. These costs can start to add up. To avoid any nasty surprises, make sure you’re aware of them before you start the purchase journey.
Set yourself up for success
Consider getting pre-approval on a loan amount from your bank. Knowing how much you can borrow will help you shop realistically. You can usually get pre-approval on a loan for up to 90 days.
Ideally, aim for a 20% deposit. You’ll not only prove to the bank that you’re a good saver, but also avoid lenders’ mortgage insurance which can be expensive.
Can you use your super to buy a house?
There are some excellent government benefits and concessions available to first-home buyers. You may be eligible for a grant (of up to $20,000 depending on where you buy) as well as stamp duty savings. Check out the Government's First Home website to see what you might be eligible for. You and your partner may each be able to access some of your super through the First Home Super Saver (FHSS) scheme.
If you’re interested in learning more, or to find out if you’re eligible for the FHSS scheme, speak to one of our financial advisers.
How super can help
Since 2017, the Government has allowed you to access up to $30,000, plus any investment earnings of your super, to help you buy your first home. You can only access the super that was contributed by you through personal after-tax or salary sacrifice contributions. Contributions made by your employer (your compulsory Super Guarantee) can’t be accessed. You must also be an eligible first-home buyer. Once you’ve confirmed you’ll be able to access the scheme it’s easy to get started.
- Begin making additional contributions to your super, either through salary sacrifice or after-tax personal contributions.
- You don’t need to notify your super fund that you’re doing this but keep in mind that there are limits to how much you can contribute each year.
- Once you’re ready to buy your first home, simply apply to the ATO and they'll confirm the next steps.
There are considerations you should think about before you decide to use the FHSS scheme. We recommend speaking to one of our financial advisers to talk you through eligibility criteria and whether accessing super to help you buy your first home is the right decision for you.
Your handy checklist
Aim for a 20% deposit
A budget calculator can help you work out how much you’ll need to put away and for how long.
Having pre-approval from your bank puts the control in your hands at auction time or if you're making a private offer on a property.
Buy what you’re comfortable withAs well as the mortgage repayments you’ll be responsible for council rates, water bills and property maintenance. Consider all these costs before you decide how much to borrow.
Understand why you’re buyingBuying a house shouldn’t be about not wanting to ‘miss out’ in the market or because you think you should have purchased something by a certain age. Balance out purchasing a home with the lifestyle you want to lead.
Have a strategyDo your research. First homes are rarely 'forever' homes so think about what you might want to do with your property once you move out (sell or rent it) as this may impact where you look and what you buy next.
Dot your i’s and cross your t’sGenerally you can’t tell if a house has structural problems until you get a building and pest inspection done. Damage to stumps, water damage and leaking bathrooms are common - but not always obvious issues in a house. If you're looking at buying an apartment see if you can access minutes from body corporate meetings which may highlight existing issues such as major painting or repairs.
Take advantage of first-home owner benefitsUsing super to buy a house is possible through the FHSS scheme. The rules and regulations around this can be complex so speak to one of our experienced advisers to find out more.
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