Your first home loan doesn't have to leave you broke.  We have some clever strategies to make home ownership more affordable.

Understanding the market
It may sound as boring as watching paint dry but this is so important for first home buyers.  Take some time to study the mortgage market and property markets.  Once you start investigating you will actually find it can be astonishing and incredibly helpful to understand the market.  Keep up to date with house prices, are they going up, down or remaining steady?  A particular suburb may have recently emerged from a slump and is ready to be the next great investment area.  Look at property performance, recent sales and rental incomes for the properties in each area of interest.  You need to know if you are getting a good deal once you put an offer in on a property and knowing the current market it the best way to keep informed.  

Also, find out what mortgage rates are doing.  You can talk to lenders, your mortgage broker or look at the official Reserve Bank rate to see if home loan interest rates are likely to change.  There are several first home loans available and it is important to ensure you get the right one.  

Once you have armed yourself with all this knowledge you will be ideally placed to know when is the best time to buy, where and how much you can get for your money.


The Price Is Right
Be absolutely sure that you are paying a fair price.  Talk to several estate agents, and mortgage brokers to get advice about average house prices in your selected areas.  Some valuations can vary so the more property insiders you talk to the better.  Mortgage brokers assist first homebuyers all the time and are aware of the current property prices.  It is a good idea to use their knowledge and experience to your advantage.  You need to know whether it is a good deal or whether you should walk away.


Housemates Pay Rent!
Maximise your income by renting out any spare rooms you have in your property.  The extra funds can prove very useful should you wish to renovate or buy a second home in the future. 

If you determine that the rented portion of your home is 20% then as an owner-occupier you would have to pay Capital Gains Tax on 20% of the capital gain at sale time.  However, the homeowner is entitled to claim tax deductions against the rental income for 20% of property expenses such as mortgage interest, rates, insurance, depreciation, repairs and maintenance.

It’s worth noting that you can add equity to your property faster by paying off the home loan at higher rate, so having a housemate can prove a financial benefit in several ways.


First Home Owners Grant
The First Home Owners Grant certainly makes buying your first home more affordable.  This grant goes a long way to covering the costs of buying a home.  You may choose to use it as your deposit on a property, or put it towards paying off all the purchase costs like settlement fees and property valuations.  Either way, the money is a helping hand to assist first home owners to buy affordable property.

The grant was increased in 2008 but is now due to be reduced as of 31 December 2009.  The original first home owners grant of $7,000 is still available to eligible first home buyers. 

The grant was boosted by the Federal Government during the global financial crisis to boost the property market but is now winding back to the original $7,000. 


Stamp Duty Concessions
As well as the FHOG, many first home buyers are entitled to concessions on stamp duty.  Each state has different rates and concessions but in most cases the savings are between $500 and $15,000.  As a first home loan buyer you should check with your mortgage broker to ensure you are getting all the financial benefits available to you.  The concessions are another way that buying your first home can be more affordable thank you think.  You can check the concessions in your state here.


Invest while you live at home
The best of both worlds: you purchase an investment property and rent it out, and continue to board at home with your generous parents.  This was a popular option with younger generations over the previous few years, as property hit high prices and interest rates continuously rose.  First homebuyers could purchase a property for rental income and live at home while paying rent which would almost certainly be less than a private rental.   Many parents see this as an attractive alternative to going guarantor on their child’s mortgage.

To get the best of both worlds, you may wish to consider moving into your property initially to benefit from first homebuyer grants and other freebies, and then converting the property into an investment later.


Want to strike now while rates are low?  If you want to buy soon, call us on or submit your details using our on-line form.  When you talk to one of our local mortgage brokers you will know you have the support of an expert.