Understanding Unit Purchases for First Home Buyers
Purchasing your first unit in Templestowe represents an excellent entry point into the property market. Units typically require a smaller deposit compared to houses and offer lower maintenance responsibilities, making them an attractive option for first home buyers. However, understanding the specific requirements and available support can make a significant difference to your purchasing power and ongoing financial position.
When buying your first home, particularly a unit, you'll need to consider strata fees, building regulations, and body corporate rules alongside the standard considerations that apply to all property purchases. This guide will walk you through the essential elements of securing finance for your first unit purchase in the Templestowe area.
First Home Buyer Eligibility and Government Support
Before you begin your property search, it's important to understand your first home buyer eligibility and what assistance is available. The Victorian Government offers several schemes designed to help first home buyers enter the market:
- First Home Owner Grant (FHOG): Available for eligible first home buyers purchasing a new or substantially renovated property
- First Home Buyer Stamp Duty Concessions: Potential exemptions or reductions on stamp duty for properties under certain price thresholds
- First Home Loan Deposit Scheme: Allows eligible buyers to purchase with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI)
- Regional First Home Buyer Guarantee: Additional support for buyers in designated regional areas
Understanding which schemes you qualify for can substantially reduce your upfront costs and make your first home buyer budget stretch further. At Traj Finance, our mortgage broker in Templestowe can help you determine your eligibility and maximise available benefits.
Low Deposit Options for Unit Purchases
One of the most significant barriers for first home buyers is saving a deposit. Traditionally, lenders required a 20% deposit to avoid Lenders Mortgage Insurance (LMI), but several low deposit options are now available:
- 5% Deposit: Through the First Home Loan Deposit Scheme or certain lender programs
- 10% Deposit: More widely available across various lenders with LMI
- Gift Deposit: Some lenders accept genuine savings combined with gifted funds from family members
When considering a unit purchase, it's worth noting that some lenders have specific requirements regarding the type of unit they'll finance. Factors such as the number of storeys, size of the building, and percentage of owner-occupiers versus investors can impact your home loan options.
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Choosing Between Interest Rate Options
Once you've determined your deposit amount, you'll need to select an appropriate interest rate structure for your first home loan. The two primary options are:
Fixed Interest Rate
A fixed interest rate locks in your repayments for a set period, typically one to five years. This provides certainty and helps with budgeting, particularly valuable for first home buyers adjusting to mortgage repayments. However, fixed rate loans often have restrictions on additional repayments and may not offer features like offset accounts.
Variable Interest Rate
A variable interest rate fluctuates with market conditions and lender decisions. While this creates some uncertainty in your repayments, variable loans typically offer more flexibility and features such as:
- Offset account facilities that can reduce interest charges
- Redraw facilities allowing access to extra repayments
- Interest rate discounts for professional packages or high-value relationships
- No limitations on additional repayments
Many first home buyers opt for a combination, splitting their loan between fixed and variable portions to balance stability with flexibility.
The First Home Loan Application Process
When you're ready to apply for a home loan, having a first home buyer checklist ensures you've gathered all necessary documentation. The first home loan application typically requires:
- Proof of identity (driver's licence, passport)
- Evidence of income (payslips, tax returns, employment contracts)
- Bank statements showing savings history and spending patterns
- Details of existing debts and financial commitments
- Information about the property you're purchasing
Securing pre-approval before you start actively searching for a unit gives you confidence in your borrowing capacity and demonstrates to vendors that you're a serious buyer. Pre-approval typically lasts 90 days and allows you to act quickly when you find the right property.
Additional Schemes and Considerations
The First Home Super Saver Scheme allows eligible buyers to save for a deposit within their superannuation fund, potentially benefiting from tax advantages. You can contribute up to $15,000 per financial year, with a total cap of $50,000 per person, then withdraw these contributions (plus associated earnings) when purchasing your first home.
When purchasing a unit specifically, consider these additional factors:
- Review the body corporate financial statements and minutes from recent meetings
- Understand the sinking fund balance for future major works
- Check for any special levies or planned capital works
- Confirm the strata fees and what they cover
- Ensure the building has appropriate insurance
Working with Traj Finance
At Traj Finance, we specialise in helping first home buyers throughout Templestowe and surrounding areas including Lower Templestowe and Doncaster. Our team understands the local property market and has established relationships with multiple lenders, allowing us to find suitable home loan options for your circumstances.
We can assist with:
- Comparing home loan options across multiple lenders
- Identifying available first home buyer grants and concessions
- Structuring your first home loan application to maximise approval chances
- Managing the entire loan process from pre-approval through to settlement
- Conducting a loan health check as your circumstances change
Purchasing your first unit in Templestowe is an achievable goal with the right planning and professional support. Understanding your home loan options, maximising government assistance, and choosing appropriate loan features will position you for long-term financial success.
Call one of our team or book an appointment at a time that works for you to discuss your first home purchase. We'll work with you to develop a tailored strategy that aligns with your financial goals and helps you secure the keys to your first unit in Templestowe.
