A first-time buyer's guide to home loans.

Securing a home loan is a daunting process for anybody, but if you've never been through the experience before, it can be downright stressful and confusing. This isn't the best way to feel when you're embarking on what should be an exciting journey, and a little extra knowledge can go a long way towards enjoying the process and securing the very best loan.

After all, a new house is the most expensive purchase most of us are ever going to make, so it makes sense to understand the process and feel comfortable at every step on the way. To help, the team here at Beyond Bank have put together a handy guide to home loans for first-time buyers.

Let's start with the basics. There's no such thing as a silly question when it comes to home loans, and having a good understanding of what you're applying for will make it much easier to get everything you need before making an application.

Essentially, a home loan is simply money that you've borrowed in order to purchase a property. Unlike other types of borrowing, a home loan typically has a much longer repayment period, often up to 30 years, in order to allow you plenty of time to pay back what you've borrowed.

Like other loans, you will accrue interest over the lifetime of your home loan, which is paid back to the lender along with your standard repayments. This interest will be calculated at either a fixed or a variable rate. As you pay off more of the loan, the amount of interest that you'll accrue will decrease, until eventually you've paid off the entire mortgage and own your property outright.

Because properties are such significant investments, you'll need to have a certain amount saved up before you can apply for a home loan. This is known as a deposit, and the amount of money you can put towards a deposit will have a significant impact on the types of loan you are eligible for. The typical amount that you'll need is roughly between 10 and 30 per cent of the property's value.

If you can pay a larger deposit, you'll typically be able to secure a better loan with a lower interest rate. 

As well as this deposit, it's important to make sure that you know how much you'll have to pay in other fees as part of the purchase process. A few of these include stamp duty, legal fees, home or contents insurance and any other rates such as for land or water. Forgetting to account for these is a very common mistake, and can leave your finances unnecessarily stretched.

So, now that you’ve saved up enough for your deposit and any other fees as part of the purchasing process, it’s time to secure your loan. Where do you start?

Here at Beyond Bank, we like to keep things as simple and as easy for our customers as possible. That’s why you can apply for a home loan either online, over the phone or in person. As a first-home buyer, you may be eligible for the First Home Owner Grant (FHOG), which you may be able to put towards your deposit. If you are eligible, our lending consultants will lodge your application for you, helping to get it done quickly and properly, and setting you on the fast track to home ownership.

To find out more about home loans, or if you have any questions at all about the process, contact the Beyond Bank team today.