Will I have to pay stamp duty on my new home in Melbourne?

Not necessarily – the Victorian Government abolished stamp duty for first home buyers purchasing property or land for $600,000 or less in 2017. For first home buyers purchasing property between $600,000 and $750,000, you may be eligible for a stamp duty concession.

How much is the First Home Owner Grant worth?

Provided you meet the eligibility criteria for the First Home Owner Grant , you can qualify for up to $10,000 to put towards your first home purchase if you live in Melbourne. After this, you can qualify for the land transfer duty waiver of 50% for new properties or 25% for existing properties or vacant plots, provided your home is worth less than $1 million.

Is there any assistance available to me as a low-income earner in Melbourne?

Yes – the Victorian Homebuyer Fund (VHF) is designed to help low-income earners gat a home loan with a smaller deposit. Eligible participants only require a 5 per cent deposit, and the Government provides up to 25 per cent of the purchase price in exchange for an equivalent share in the property.

How much does my credit score affect the home loan I’m able to get?

Not hugely – because mortgages are backed by a significant appreciating asset in the form of property, your credit score won’t usually be a major factor in your home loan. If you have a bad credit score, or defaults or bankruptcies on your file, you may not be approved for financing.

Can I refinance my mortgage to get a loan with a lower interest rate?

Yes – by continually comparing home loan offers and rates with a view to refinancing , you can save yourself a significant amount of money. This involves taking out a new home loan, which you use to pay off your existing mortgage and repay your home loan on updated terms. However, you may incur fees if your current loan doesn’t permit early exits. Even if you have to pay these fees, though, the benefit of refinancing might outweigh its cost.

How long does the home loan process take?

Unlike smaller loans, the home loan application and approval processes are typically longer with more moving parts. However, they’re not always hugely long and can be processed and approved within seven days, with pre-approvals available within just 60 minutes. This is dependent on several factors, such as the complexity of your financial situation and whether all of your documentation has been submitted correctly. Settlement on your home purchase is likely to take several further weeks, however.

What happens at the end of a fixed rate home loan term?

Once your fixed term ends on your home loan, your home loan will switch to a variable rate. This is known as the revert rate and is often higher than the standard variable rates you’d find with your lender. Because of this, you may find it best to refinance to a lower rate or simply refix your rate once again.

Are there any fees related to paying out my mortgage early?

No – fees charged for paying out your loan early on a variable interest rate were banned in Australia in 2011, so you won’t have to worry about exit fees on your loan. However, if you’re currently paying off a mortgage that you took out before July 1, 2011, you may have exit fees included in your contract. It’s important to check with your lender and review your contract to determine whether this is the case.