Why Units Are Popular Among First Home Buyers
Units represent an excellent entry point into the property market for many first-time buyers in Mornington. They typically require a lower loan amount compared to houses, making them more accessible for those building their borrowing capacity. The benefits of purchasing a unit include lower maintenance responsibilities, often better security features, and proximity to amenities that appeal to first-time homeowners.
When buying your first home, understanding your financial situation is crucial. Units generally offer a more achievable path to homeownership, particularly when combined with first time home buyer programs and schemes available through various lenders.
First Home Owner Grants and Government Schemes
First home buyers purchasing units can access several government initiatives designed to support their journey:
• First Home Owner Grants (FHOG): Available for eligible first-time buyers purchasing new properties
• Home Guarantee Scheme: Allows qualified buyers to purchase with deposits as low as 5%
• First time home buyer schemes: Various state-based programs offering stamp duty concessions
These packages can significantly reduce the upfront costs associated with purchasing your first unit. The Home Guarantee Scheme is particularly valuable as it can help you avoid lenders mortgage insurance (LMI) while maintaining a lower deposit requirement.
Understanding Interest Rates and Loan Options
When applying for a home loan to purchase a unit, you'll encounter various interest rate options:
Variable Interest Rate: Fluctuates with market conditions and lender policies
Fixed Interest Rate: Remains constant for a specified period, providing payment certainty
Many lenders offer interest rate discounts for first-time buyers, and having access to banks and lenders nationwide through a mortgage broker ensures you can compare multiple options. This access to Home Loan options from banks and lenders across Australia means you're more likely to find suitable terms for your circumstances.
The Application Process for Unit Purchases
The streamlined application process for purchasing a unit involves several key steps:
- Assessment of borrowing capacity: Lenders evaluate your income, expenses, and financial commitments
- Pre-approval: Get pre-approved to understand your loan amount limits
- Property evaluation: Lenders assess the unit's value and loan to value ratio (LVR)
- Documentation: Provide bank statements and other required financial documents
Financial Considerations Specific to Units
When purchasing a unit, there are unique financial aspects to consider:
Strata Fees: Ongoing costs for building maintenance and common area upkeep
Special Levies: Potential additional costs for major building repairs or improvements
Body Corporate Rules: May affect future rental potential if considering investment loan options later
Your loan to value ratio (LVR) may differ for units compared to houses, depending on the lender's policies. Some lenders view units as higher risk, particularly in certain locations or building types.
Maximising Your Investment Potential
Many first-time buyers view their unit purchase as a stepping stone in the property market. Consider features that may benefit you if you later convert the property to an investment:
• Location near transport and amenities
• Rental demand in the area
• Potential for capital growth
• Building quality and age
While your first Home Loan focuses on owner-occupation, understanding investment loan application processes can help with future property decisions. An offset account can also provide flexibility in managing your mortgage payments and reducing interest costs over time.
Working with Mortgage Professionals
Purchasing your first unit involves complex decisions about loan structures, interest rates, and government schemes. Professional mortgage brokers have access to banks and lenders nationwide, enabling them to present multiple options tailored to your specific needs.
They can help you understand which first time home buyer programs apply to your situation and ensure you're maximising available benefits while minimising costs like stamp duty and LMI.
The property market presents various opportunities for first-time buyers, and units often provide an achievable entry point. With proper planning and professional guidance, you can successfully navigate the home loan application process and secure suitable financing for your first property purchase.
Call one of our team or book an appointment at a time that works for you to discuss your unit purchase options and explore the most suitable loan structures for your circumstances.
