Kudos to the first-time property purchasers in Australia, especially in Townsville, Queensland, Brisbane, and the Gold Coast!
Despite last year's interest rate hikes and escalating property values, recent lending statistics demonstrate their unwavering determination to acquire a home. Here are five recommendations to facilitate your inaugural home purchase in 2024.
It's admirable to witness the resilience of first-time property purchasers amidst the prevailing market conditions. Enduring 13 cash rate increases within a span of 18 months, coupled with an 8.1% surge in property prices in 2023 according to CoreLogic, underscores the challenges they faced. Nonetheless, they remain undeterred.
The most recent lending figures from the Australian Bureau of Statistics reveal a substantial 20.3% upsurge in loans extended to first-time property purchasers last year.
However, perseverance alone is insufficient when venturing into your inaugural property acquisition. Employing some practical advice can prove beneficial.
If you aspire to secure your first property, consider these top pointers to enhance your readiness for a home loan in 2024:
1. Initiate your journey with a consultation with your mortgage advisor
First-time property purchasers often find themselves navigating uncharted waters when embarking on the home buying process. Seeking professional guidance is prudent.
We can offer insights into your loan eligibility, anticipated expenses, and proactive measures to bolster your financial standing.
2. Cultivate a habit of diligent saving
Establishing a commendable track record of regular saving is advantageous in the eyes of lenders. It reflects your capacity to manage mortgage repayments responsibly.
Evaluate your budget, identify areas for potential cutbacks, and endeavour to channel a significant portion of your earnings into savings.
While it may necessitate temporary sacrifices in indulgences, the long-term benefits are invaluable. Moreover, the more you save now, the less you may need to borrow in the future.
3. Deliberate on reducing your credit card limit
During the home loan application process, lenders often scrutinise the credit limit on your card rather than the outstanding balance.
This precaution is warranted as a high credit limit could potentially compromise your ability to meet mortgage obligations post-purchase.
According to an analysis by Finder of Reserve Bank of Australia data, the average credit card limit stands at approximately $9,500.
Contacting your card issuer to downsize this limit could bolster your prospects of securing the desired loan.
4. Explore government schemes supporting first-time property buyers
An array of government initiatives exists to aid first-time property buyers, ranging from First Home Owner Grants (FHOG) to potential exemptions on stamp duty.
While we can furnish information regarding eligibility criteria, conducting independent research can facilitate informed property selection.
Certain assistance schemes stipulate conditions such as purchasing or constructing a new property, along with predefined property value thresholds.
5. Reassess the necessity of a 20% deposit
Although aiming for a 20% deposit is advisable, it's worth noting that alternative options may be viable.
The First Home Guarantee and Regional First Home Buyer Guarantee empower first-time buyers to enter the market with a mere 5% deposit, sans lenders mortgage insurance.
This opportunity may expedite your journey towards property ownership.
Contact us today for a consultation regarding your inaugural home purchase. Allow us to assist you in securing a competitive home loan tailored to your requirements. To learn more, contact Premium Finance Group Australia at 1800 413 635 or email us at finance@pfga.com.au in Townsville, Queensland, Brisbane, and the Gold Coast.
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