First home buyers

QBANK’s Home Loan Hub is your guide to budgeting for a deposit, researching the market and choosing the home loan that suits you.

Buying a house is exciting, but it’s OK if it seems a little daunting. There’s a language to home loans you need to get across, and the process can seem complicated the first time around. It’s OK to need some help to understand the process – we’re ready to listen and answer your questions.

Research the market: What do you want?

There might be a difference between the first home you want and the one you can afford. Before you make any big decisions, look around where you want to live and get an idea of how much a house, townhouse or apartment costs that suits your needs.

Don’t worry if you need to start smaller, older or further from your dream suburb than you’d like. It’s OK if your first home is about getting a foot on the property ladder. Buying a first home can be the start of your dream.

QBANK tip: If you’re not sure where to look, think about how far you want to be from where you work, and what’s within a reasonable distance to commute.

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Buy or build: Know the pros and cons

There’s pros and cons to buying an existing property or building a new one.

Buying an existing home usually means a more established neighbourhood with services and activities already there. But building may mean lower prices and a chance to choose layouts and fittings.

QBANK tip: A free QBANK Property Report helps you find out more about an area where you want to buy. Our home loan specialists provide specific details if you’re looking at a specific property, and an overview of properties for sale and the property market in that suburb. Browse real estate websites to see what’s available where you want to live, or work backwards and start with your price range and let that guide where you look.

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Do the math: How much can I borrow?

Getting an idea of your borrowing power up front means you won’t waste time looking at properties you can’t afford.

Use our borrowing power calculator for an estimate of how much you can borrow based on what you’re earning and spending. This gives you an idea of the deposit you’ll need based on how much you want to spend. It’s also a good time to get across your credit history and think about debt consolidation.

QBANK tip: Look for a bank that understands your lifestyle. When we review home loan applications, we look at your allowances, penalties and overtime. Our decisions are made by real people, not computers, so this can make a difference to getting a loan approved and how much you can borrow.

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Borrowing power Vs budget: How much can I afford?

Getting an idea of your borrowing power is a great start, but then it’s time to think about what you can afford. Make sure the numbers are going to add up by using a budget planner to pull together a monthly plan for what’s coming in and where you’re spending.

Use our loan repayments calculator to work out what your home loan repayment may be based on what you’d like to borrow. Remember, you need to think about what happens if interest rates change. Does your budget have some wiggle room for unexpected expenses? You might need to think about getting more savings behind you or spending less on your first home.

QBANK tip: Budgets are a great way to plan where your money is going. Start with essential costs like rent, insurance and loan repayments, and then add the non-essential extras that you may be able to prune back.

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More than the sale price: Get real about costs

Your deposit isn’t the only cash you’ll need behind you to buy a home. You’ll need to cover other costs like:

  • building and pest inspections
  • stamp duty
  • conveyancing (the process of transferring property ownership)
  • council rates and settlement fees
  • moving costs including breaking a lease or removalists.

Use our buying a home calculator to estimate how much you may need to cover all the costs.

QBANK tip: Try to have a cash backup for buying costs. If you’re going to use a credit card for some expenses, be smart and have a plan on paying it off.

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LMI: Understanding lender’s mortgage insurance

Lenders Mortgage Insurance protects the lender if you are unable to meet your mortgage repayments. Generally speaking, you need to have a 20% deposit if you want to avoid LMI.

If you’ll be paying LMI, some banks let you add LMI to your home loan total – you can pay it off as part of your mortgage. Other lenders require LMI to be paid upfront before approving your loan.

QBANK tip: The bigger your deposit, the less your LMI. Using a savings calculator helps to put a timeframe on a savings goal for your deposit.

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If a lump sum is not realistic, you may be able to avoid LMI by having a guarantor on your loan. A family member uses their equity to guarantee your loan.

QBANK tip: Think carefully about who could guarantee your loan. Remember, they’re liable to cover costs of your mortgage if you can’t repay the loan.

Talk to a Mobile Banking Specialist at a time and place that suits you. They’ll talk you through the guarantor process and what paperwork is needed.

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Budget boost: Queensland First Home Buyers Grant

Depending on the type of property you buy, you may be eligible for the Queensland First Home Buyers Grant. You may be able to get $15,000-$20,000 towards building or buying a new house, unit or townhouse if it’s valued at less than $750,000 and you meet a range of conditions.

QBANK tip: You may still be eligible for the grant if you are buying a new home ‘off the plan’. Double-check the grant information and check if you qualify, and don’t be afraid to ask questions.

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Perfect match: Choosing the right home loan

Your loan choices may include variable interest rate, fixed rate or offset account loans. Before you find your dream home (when emotions take over), take a look at the pros and cons of each and decide on the best choice for your budget. The right loan structure can take years off your loan.

Fixed rate home loans have a set interest rate (usually for 1, 3 or 5 years). Then you’ll pay the standard variable interest rate which could be at a lower, similar or higher.

Variable rate home loans are generally aligned with interest rates set by the Reserve Bank, but lenders can change rates independently.

Offset home loans have a savings or transaction account linked to your home loan, so your balance is ‘offset’ daily against your home loan. You may pay less interest as your savings are reducing the amount you owe on the day.

QBANK tip: Use a loan comparison calculator to check out your choices side by side and see what suits you and your budget.

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Get set: Pre-approval for a loan

Once you’ve worked through your budget and organised your deposit or guarantor, you can apply for pre-approval. This is basically a guarantee you’ll have your loan approved and can make a real difference to your bargaining power as you negotiate a price for your home.

When you apply for pre-approval, we check your deposit, budget and credit history. If we decide you’re likely to be able to repay the loan, we provide pre-approval to a fixed amount.

Talk to a Mobile Banking Specialist at a time and place that suits you. They’ll talk you through the pre-approval process and what paperwork is needed.

QBANK tip: Pre-approval usually lasts for 3 months, so you have some time to find the home that's right for you.

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Let’s go: Finding your new home

Now comes the exciting part: house inspections and looking for the home to suit you. Try to make a list of must-haves to help keep you on track as you look. But be realistic, if you’re on a strict budget, a swimming pool might have to wait until you can upgrade.

When you find a home you're keen on, get a free QBANK Property Report – specific to the home you’re making an offer on. Your Mobile Banking Specialist, can provide details about the property, estimated value and sales and rental history.

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