Having lived most of our lives outside of Australia, “new” immigrants often have little to no idea as to how buying a house in Australia works. This was certainly the case for me. I had so many questions and so many things I didn’t quite understand.
Today’s feature is going to be a little different than usual as we have with us a mortgage broker who specializes in helping Filipinos in Australia with their home loan. It will be different because she won’t be sharing much about her Aussie story. Instead, she will generously share some insights on the financial aspects of buying your first home in Australia.
Please welcome, Mortgage Alley’s Sheanne:
A Bit About Me, Sheanne
I was born and raised in Angeles City, Philippines but have always made it my goal to live overseas. After graduating from college, I worked in the Philippines for 2 years just to gain enough work experience before we moved to Singapore where I worked in the corporate world specifically in global mobility. I lived in Singapore with my husband for 10 years before we decided to move to Australia for good.
One of the deciding factors for this decision was when we had our first child and Australia just seemed like the perfect place to build a family and raise our children. We moved to Australia via the skilled visa pathway since my husband is an engineer.
After we moved here, I met my now mentor who thought I would be a good mortgage broker and asked me if I wanted to do it. The ironic thing is I didn’t even know what a broker was at that time but after researching and finding out what it’s about, I came to the conclusion that it is indeed the perfect job for me as I can apply all the things that I am good at.
It involves processes, one has to be detail oriented, and providing great customer service is very important. Most of all I get to talk to our fellow kababayans and help them out in the biggest purchase of their life. It is very fulfilling and rewarding. We are now based in Queensland but I help our kababayans all over Australia since all of the transactions and meetings are done online. This job also allows flexibility as I am self-employed and I can manage my business while balancing it with motherhood duties.
Steps Involved in Purchasing Your First Home
The very first step that first home buyers should do before looking for a house is to determine their budget and how much they can afford. Knowing your borrowing capacity is very important.The next step is getting a pre-approval. This next step is optional but recommended because it speeds up the process. Getting pre-approved for a mortgage can also make you a more attractive buyer to sellers.
Once you have a pre-approval, you can start looking for homes that fit your budget and criteria. When you find a home you like, you’ll make an offer to the seller. If your offer is accepted, you’ll need to conduct inspections on the property to ensure there are no major issues. If the inspections come back clear, you can finalize the sale and close on the property. This involves signing a lot of paperwork and paying other purchase costs, which can include stamp duty, fees for title searches, appraisals, and other costs.
Please note this is just the general steps involved in buying a house for the first time. The steps may vary depending on what type of property you are purchasing (off-the plan apartment, construction, house & land package)
Boosting Your Home Loan Approval Chances
When preparing to purchase a home, you need to manage your daily expenses and cut out unnecessary spending to save more money for your deposit. The higher the deposit, the better interest rates you get and your loan application is less riskier for the banks since you are putting more money into the purchase.
It’s also important to ensure you have stable jobs and if borrowing capacity is an issue, try to cancel any credit cards that you do not use as this can reduce your borrowing capacity. Downloading a free copy of your credit report is also a good idea. You can check and verify if the details in your credit report are accurate and you can get them rectified in case there is any information in there that may affect your home loan application.
Do not make multiple loan inquiries from different banks and lenders as this will affect your credit score. Speak to a mortgage broker to discuss your specific financial situation and needs and they will be able to guide you on what are the next steps you need to do to prepare for home loan application.
Credit Cards and Credit History
Not all lenders use credit report in their assessments but having a good credit history will certainly help with your home loan application. This does not necessarily mean that you need to have a credit card. Having a utility account or a mobile phone account that you pay on time will help to develop your credit history.
Not having a credit card does not have a bad impact on your home loan application. A credit card is considered a liability so the biggest impact it will have on your home loan application is it will lower your borrowing capacity. A credit card with a $10,000 limit can lower your borrowing capacity by approximately $50,000.
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Is the First Home Guarantee Scheme for you?
**One of the advantages Australian citizens have over permanent residents when purchasing a home is that they are eligible for the First Home Guarantee Scheme. Under the scheme, eligible first home buyers can purchase a property with a deposit of as little as 5% of the property’s value, without having to pay for lenders mortgage insurance (LMI).
**Update: Permanent residents are now also eligible to apply for the First Home Guarantee Scheme.
Buying Interstate
When buying an investment property interstate, it’s important that you do your research, engage local professionals, and conduct thorough inspections and due diligence. Every state and territory has its own property market, so it’s important to do your research and understand the local market conditions, property values, and any other factors that may affect your purchase.
It can be helpful to engage a local real estate agent who can provide you with valuable insights about the area and the properties available. They can also help you navigate the local property market and negotiate on your behalf. It’s important to conduct thorough inspections and due diligence, even if you’re buying a property sight unseen. Consider engaging a building inspector and conveyancer to assist with these tasks.
On the other hand, purchasing a property to serve as your owner occupied home interstate is a different story since you need to show the lenders that you have stable jobs in the state that you are moving into (i.e. you will be assigned to a different branch, you work from home, etc).
How a mortgage broker at Mortgage Alley Can Assist
I help and guide first home buyers navigate the intimidating and sometimes confusing home buying process. I understand their goals, financial position and their home lending needs in order to provide advice and solutions. I also help to apply for the home loan on their behalf and provide assistance from application to settlement. The best thing is my service is free and as a mortgage broker we have a statutory obligation to act in the best interests of consumers so you are rest assured that mortgage brokers always act in your best interest.
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Authors: Sheanne of Mortgage Alley x My Aussie Story
About the ” Your Aussie Story” series:
Immigrants in Australia, though from different cultures and backgrounds, tend to have similar experiences and common ‘struggles’ as they build their new life here in Australia. Through My Aussie Story, I’ve been trying to help out people like myself to be able to navigate the Australian way of life a little bit easier by sharing my own experiences.
I’ve always believed that every migrant’s journey would be less challenging if we learn from each other. This is why we’ve created Your Aussie Story. Your Aussie Story is a ‘series’ in our website where we feature inspiring stories of immigrants in Australia.
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Disclaimer All content and information in this post is for purposes of sharing my experiences only, does not constitute professional advice and does not establish any kind of professional-client relationship.
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