Our First Home Owner Guide
We understand how overwhelming the process of purchasing your first home can be. That’s why we’ve developed a step-by-step guides that unpack the information you need to land your first property.
Our First Home Owner Guide includes handy tips and information about:
- Budgeting and research to secure your deposit.
- Extra costs and considerations such as stamp duty.
- Additional government options available.
- Choosing a loan to suit you.
- The meaning of comparison rates, LVR and Lenders Mortgage Insurance (LMI).
- Loan assessment factors and pre-approvals.
- Definition of a cooling off period.
- Navigating auctions.
Saving for a deposit
It’s inevitable… you will need a deposit to purchase a property. The first step is working out how much you might need and, to do this, you need to look at how much you might be able to borrow. You can use the basic calculation:
The price of the property – the amount you can borrow (your borrowing/lending capacity) + possible fees and charges = your deposit.
You can also use our How Much Can I Borrow? Calculator to get a rough estimate.
Once you have the deposit amount, then you can get to budgeting and saving.
See the helpful links below to find out how to start:
Understanding costs
Government fees
- Stamp duty
- Lodgement fee
- Transaction fee (associated with a property transfer)
- Title search
Bank fees
- Valuation fee
- Mortgage preparation fee
Other fees that may be applicable
- Conveyancer
- Lenders Mortgage Insurance
- Building inspection
Tip: don’t forget to factor in Home Insurance, council fees and the emergency services levy into your costs.
First Home Owner Grants
In South Australia, the First Home Owner Grant is offered to those who meet particular criteria, including that you are buying or building a new home and that home will be your principal place of residence.
From 15 June 2023, Stamp Duty Relief for eligible first buyers was also made available to SA first homeowners who meet certain requirements. To be eligible for a stamp duty relief on the transfer of land, you must be buying:
- a new home* (including a house, flat, unit, townhouse or apartment);
- an off-the-plan apartment; or
- a house and land package (contract to build – comprehensive building contract);
- vacant land to build your new home on;
- must be the principal place of residence.
You can find out more about these SA grants, the benefits and the eligibility criteria on the Revenue SA. The NT government offers a similar First Home Owner Grant (FHOG) which can be viewed on the Northern Territory Government website.
Family Guarantee
A Family Guarantee (also known as a Family Pledge) may be an option to help you get started if you have a smaller deposit. Guarantors can be immediate family members such as parents who have enough equity in their home and offer part of this equity as security for your loan.
The equity in their property can help make up for any shortfall in saving the minimum 20% deposit usually required to avoid the need for Lenders Mortgage Insurance (LMI) which could save you thousands of dollars or increase your borrowing power. Find out more about LMI.
First Home Buyer Loans
We have a range of fixed and variable loan options and longer loan terms to help you get your foot in the door of your first home sooner…
Getting pre-approval
Pre-approval, also commonly referred to as conditional approval, can be an important part of your home buying journey.
A pre-approval means a lender has agreed to lend you money for a home loan up to a certain limit but subject to certain conditions.
If you can gain pre-approval, this will allow you to have more confidence when looking and enquiring into the home you might purchase because pre-approval can give you:
- an idea of your borrowing power and help you set a budget limit.
- the ability to present as a serious home buyer (this is particularly useful and important at auctions).
- a faster approval process for your final home loan application.
It must be noted that pre-approval is not a definitive approval for your home loan application.
To gain pre-approval, the lender will take your overall financial situation into consideration, and you will need to verify things like your identity, income and expenses with supporting paperwork and documents.
A pre-approval from Police Credit Union is valid for 90 days and can take up to two to three weeks to approve.
You can start the process for pre-approval through our online application form.
Other useful links
You may find these websites helpful as you start your journey to buying a home.
Useful Police Credit Union articles:
Key terms
Understanding some key terms we use when talking about home loans.
Conveyancer
A trained and accredited professional who will undergo the legal transfer of a property title between the vendor and the new property owner. Conveyancers liaise between banks or brokers and prepare all the required documents to ensure settlement is finalised on time.
Deposit
This refers to your initial contribution to the purchase price of a property. Typically, you need a 20% deposit to guarantee your success in securing finance for a property. Find out more about our First Home Buyer Loans with a smaller deposit requirement.
Lenders Mortgage Insurance (LMI)
LMI is the insurance a lender takes out to protect themselves against any loss that may be incurred if you are unable to repay your loan. It’s a one-off additional payment that’s calculated based on the size of your deposit and how much you can borrow. LMI covers the lender and is a cost that will be passed onto you as a fee.
Loan to value ratio (LVR)
LVR is a term used when referring to the ratio of your loan / the amount that you are borrowing versus the value of the property that you want to buy. LVR is represented as a percentage. An LVR of 80% means that you have a deposit of 20% of the value of the property. And if your deposit is worth 5%, your LVR is 95%.
Stamp duty
Stamp duty is a government based charge on certain documents and transactions. Stamp duty will depend on the value of the home your are purchasing, and so, will vary from transaction to transaction.
Get in touch
Are you interested in discussing your options? We’re here to help!
Call 1300 131 844 during business hours
Email us at [email protected]
Visit a branch