First home buyers hub

Our budget planner will help you to take control of your finances. You will be able to:

• track your expenses
• compare your actual expenses and income to your estimations and see exactly where you can improve to get back on track, and
• see a summary of your budget.

Plan your budget with a budget calculator

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Use an online loan calculator to work out how much you could borrow for your first home and what your loan repayments will be. When you have a better idea of what you can afford, you can start looking for properties that fit the bill!

• How much can I borrow?
• Calculate my home loan repayments

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• How much you do you really need for a house deposit?
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Timing is everything when it comes to your first home loan and with interest rates so low and some great first home buyer incentives available, it pays to do your homework to see what’s around. You could be moving into your dream home sooner than you think!

We’ve done a little leg work to get you started. Here are our top picks:

First Home Owner Grant

If you’re buying your first home you might not have to pay stamp duty if you’re eligible for the state-based First Home Owners Grant.

Find out more

First Home Guarantee

With the First Home Guarantee, you can buy your first home with as little as 5% deposit* and save thousands with no Lenders Mortgage Insurance. It’s a federal government scheme with limited spaces available nationwide so don’t miss out!

If you’re having difficulty saving up the required deposit for a home loan, Lenders Mortgage Insurance (LMI) can help you secure a mortgage.

What is Lenders Mortgage Insurance (LMI)?

When taking out a mortgage for a new property, the expected deposit is 20% of the purchase price. As median house prices in Australia rise above $600,000, saving a deposit of as much as $120,000 can seem like an impossible task for many.

With Lenders Mortgage Insurance, you may be able to borrow a higher portion of the property price, allowing you to purchase your new home sooner – and with a smaller deposit than would otherwise be required.

LMI is a one-off insurance policy that Teachers Mutual Bank takes out to protect itself against the risk should you (the borrower) default on your loan repayments and the Bank is unable to recover the full outstanding amount of the loan.

By reducing the Bank’s risk, Lenders Mortgage Insurance could help you purchase your dream home with as little as 5% of the purchase price.

Note: Lenders Mortgage Insurance should not be confused with Mortgage Protection Insurance, which is a separate insurance policy that protects you if you are unable to make repayments on your loan.

Find out more

Book a call back

LMI premium estimator

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The high price of Australian properties, especially in major cities such as Sydney and Melbourne, can make owning your first home seem far out of reach. So it is understandable that many first home buyers look to their parents to get a foot in the bustling property market door.

If your family is in the financial situation where they can help, take the time to consider the type of help that will work best - either a gifted home loan deposit or guarantor loan.

Book an appointment

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• Understanding gifted home loan deposits vs. guarantors

Home buyers need to consider the timing of their home loan application, and it it’s worth getting in early.

• Start your home loan conversations as soon as you start thinking about buying a home.
• Avoid extra stress and be ready to make an offer by getting a home loan pre-approval.
• There’s a few methods for applying for a home loan, see our guide to help you choose.

When should you apply for a home loan?

It’s important to consider how long it takes to get a home loan, and the stages of the process. However, as a rule of thumb, if you’re starting to look at properties, you should begin your application process and at least obtain an approval-in-principle beforehand (also known as pre-approval or conditional approval)^#.

Waiting until you find a property before applying for your home loan runs the risk of missing out on your dream home. If you suddenly find a property you’ve fallen in love with and haven’t obtained your approval, there are some things to consider, such as:

• You won’t know how much you can comfortably offer on the property.
• It creates time pressure to collect the right supporting documentation.
• There’s no guarantee the lender can process and verify your documentation in time.
• You could risk losing a deposit paid.
• It can increase stress levels during a high-pressure decision.

The best thing to do is to speak to a lender as soon as you start thinking about buying a home. That way, you’ll know the answer to the all-important-question; how much can I borrow?

Our lending experts will be there to help at every step of your journey, from saving for a deposit, to helping you to apply for a home loan, through to getting the keys and making the most of your new home loan.

Book a call back

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When finding the right property, ask yourself these two questions: where? and what? 

Your ideal property is likely to be a compromise between the two.

Where is your ideal location? May be convenient for family, friends, schools, shops, transport and work. But that may make it a more expensive area, so you may need to compromise on the size and quality of home. 

What is your ideal home? May have everything you need. But it may not be available in your price range in the area you want. 

What do you want in a home?

Write out a list of everything you physically want in a home. Is it a third bedroom, a garden, a balcony, a garage, a new kitchen, an ensuite, carpets, a fireplace, etc?

Once you've written everything out, break it into three groups: the ‘must haves’; the ‘nice to haves’; and the ‘not vital’. You may also like to create a fourth list: things you definitely don’t want, such as being close to a busy road.

Take a copy of your list to every house inspection and tick any items on the list. You may even like to apply a weighted scoring model: i.e., each item on your ‘must haves’ list is worth 3 points, whereas each item on the ‘not vital’ list is worth only 1 point.

Now when you add up the points, you have a subjective way of comparing one home with another.

Location, location, location

It’s an old saying, but a useful one. How are the local amenities, such as transport, shopping, hospitals, fire stations and schools?

What will it cost you to travel to work?

Generally, the better the location, the more a property will cost. So think about the amenities you really need and use. If you’re happy to spend longer travelling to work if you have a great place to come home to, great. If you prefer to be close to work, you may need to compromise on what you can get for your money.

Do your homework

There’s a wealth of information available online, these days. You can find out recent sales and auction prices, market and economic trends, local amenities, and neighbourhood groups. Spend some time on the web, as you review and refine your preferred list of locations.

Have conditional financial approval

Never walk into a property inspection without knowing that you have conditional financial approval. You may have less than you think, or more. Better to know.

Once you know, set a maximum, and stick to it. Don’t be tempted to go higher.

Be prepared to make an offer

If you’ve done your research, you have your list of features, and your finances are already pre-approved, walk in prepared to make an offer. A good property can go very quickly, so - as long as you’re ready - go for it.

What to ask the real estate agent

Here are some sample questions to ask the real estate agent: What it is expected to sell for? This will ensure the property is within your budget.

How long has it been on the market for? If it’s been on the market for a long time, the seller may accept a lower price. Why are they selling? You certainly want to know about any negatives such as the place next door about to be demolished, or a council re-zoning. What have similar properties sold for locally? This may help you get a high and low price for the area.

Have there been any offers? It’s useful to know whether the property is in hot demand, or whether there’s not been much interest. Has a building or pest report been done? You want to identify any issues early.

Has the council approved any renovations or additions yet to be done? If the home is not quite right, it would be good to know what would be quick to fix up. Where are the local shops? Ask about the local shops, transport, hospital, police station, and more.

Are there any future developments? E.g. Tunnel, shopping centre, airport, road widening etc.

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• Established home vs new build? The pros and cons
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A mortgage Offset facility is an eligible transaction account linked to an eligible home loan account. Instead of being charged interest on the full loan balance, interest is charged on the loan balance minus the balance in the Offset account. Read on to see how an Offset facility works, plus more.

Making fortnightly versus monthly repayments

You can further shorten the time it takes you to repay your home loan by making fortnightly home loan repayments, as well as using the 100% mortgage offset facility. Paying fortnightly allows you to make the equivalent of one extra monthly repayment per year. The following scenario gives you an idea of how this works.

Learn more

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• What is the difference between offset and redraw?

Complete an application

Complete a home loan application and send it to us with supporting documentation. If you need assistance to complete the application contact us here and speak to a home loan specialist or make an appointment with your local mobile lender.

Expected time frame: 10 to 15 minutes.

Pre-approval (also referred to as conditional approval)

Your application and supporting documents are checked and you will be contacted with pre-approval or advised if more information is required to process your application. Your pre-approval will remain valid for up to 90 days subject to your financial position remaining unchanged.

Expected time frame: 48 to 72 hours.

Valuation

On pre-approval a property valuation will be ordered. The valuer will either contact you directly or call the real estate agent to gain access to the property. They will submit a report to Teachers Mutual Bank.

Expected time frames: Depending on accessibility of the property

Final approval (also referred to as unconditional approval)

Based on the result of the valuation and other conditions of the loan being fulfilled, formal approval is granted for your loan.

If your loan is for the purchase of a new property we will notify your solicitor immediately and request required documentation such as the contract of sale and transfer documents.

Expected time frame: 24 hours from above if no further information required

Home loan contracts dispatched

Loan contracts and mortgage documents are mailed to you or your solicitor.

Expected time frame: 24 to 48 hours

Contracts and documents

Read through the contract and support documents carefully. Check with your solicitor to see if you need to see them to explain the documentation. Sign and return all documentation in the reply paid envelope provided.

Loan funded and settlement booked

Once your documentation has been returned, a final check will be done to ensure there are no errors and legal documents have been fully executed.

We will then liaise directly with your solicitor or previous lender to arrange a settlement date.

This date will depend on the vendor, other lenders and solicitors.

Congratulations!

Well done, you can now organise the removalists.

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• Applying for a home loan: how to give yourself the best chance
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When buying a property, you’ll need a range of experts to make it happen. The financial expertise we can offer you at Teachers Mutual Bank is just the beginning.
Here is a guide to the specialists involved in buying a property, and what they do.

Solicitor or Conveyancer

They will protect you by checking the vendor/s contract of sale, run searches on the property, transfer the title or ownership of the property.

It is your solicitor or conveyancers' responsibility to:

• Check that you have sufficient funds to complete the sale
• Ensure that you are advised on what inspections should be undertaken, depending on the type of property
• Prepare or review the Contract of Sale on your behalf
• Organise necessary title searches
• Check if there are any encumbrances or caveats on the title of the property that you are wishing to purchase
• Carry out the conveyancing
• Protect all your interests during the sale
• Calculate adjustments for taxes, council and water rates for settlement
• Arrange, attend and complete settlement of sale.

Fees are very competitive and are typically based on the work required. Fees may also include charges for a number of disbursements including local council or rates certificates. They will also organise your pre-purchase pest and building reports.

Pest inspector

A pest inspector will check for defects such as: termite activity (past or present), past termite treatments, borer damage to timbers, significant decay, poor sub-floor ventilation and will make recommendations. The pest inspector should be licensed and have professional indemnity insurance. A property may be deemed as inadequate security if the pest report returns active termites and the costs to repair are too high.

Building inspector

A building inspector will identify significant building defects or problems and suggest repair costs for the defects found. The inspector will compare the property inspected with buildings of similar age and construction and give an overall rating for the dwelling. A property may be deemed as inadequate security if there are major defects and the costs to repair are too high.

If you’re almost ready to complete your home loan application, gathering the right information and supporting documents can help accelerate the process. Here’s a checklist of information you’ll need to help get you started.

• Lenders are most concerned about your capacity to repay your loan over the life of the loan.
• If you don’t have the right information it can stall the process. 
• You’ll need to provide details about your income, assets, liabilities and expenses. 

What sort of information do you need to apply for a home loan?

You’ll need to know the following to get started:

• Income: How much do you earn?
• Assets: What do you own? 
• Financial liabilities: What do you owe?
• Living expenses: How much do you spend monthly?

In short, a mortgage lender’s main objective is to work out whether you can comfortably meet your mortgage repayments, without causing you any financial hardship. The information that is requested by a lender might seem extensive, but they have to fulfil certain requirements under Responsible Lending laws - so it’s important to get it right. If you don’t provide the correct information upfront, this can lead to a delay in the process and multiple back and forth communications between yourself and the lender. 
Income

What types of income can you declare?

You may have different sources of income so, when it comes to declaring your income on your home loan application, try to think about what you declare to the Australian Taxation Office (ATO) when you lodge your tax return. Anything you declare to the ATO as income can usually be declared on your home loan application. 

Sources of income might include: 

• Wages or salaries earned from full time, part-time or casual employment.
• Self-employed income (sole trader, partnerships, company or trust).
• Rental income.
• Investment returns (interest and dividend income).
• Pensions and/or any Government benefits.
• Other income, such as, child support payments.

Assets

What assets should you include?

When thinking about the assets you own, this is anything that has a tangible value. That means anything that has a precise measurable value. When you quote values for each item, think about what a current market value might be for them. If the items are insured, you can quote the insured amount as a guide. 

Valuable assets might include: 

• Property, including land.
• Motor Vehicles (Car, motorbike, boat, etc.).
• Investments, such as, share portfolios or term deposits.
• Superannuation.
• Savings.
• Professional equipment (i.e. tools of trade).
• Home Contents (i.e. the insured amount).

Financial liabilities

What financial liabilities will you need to quote?

When lenders enquire about any existing financial liabilities you might have, you’ll need to tell them how much you repay each month along with the outstanding balance, as well as who the lender is and how long is remaining to repay it. 

Some examples of financial liabilities include:

• Existing mortgages, including any loans you may be guarantor on.
• Personal loans or car loans.
• Credit cards or overdrafts.
• Hire purchase or leases.
• Outstanding HECS fees. 

Monthly expenses

What monthly expenses do you need to provide? 

You’ll be asked to provide a summary of your daily and monthly spend or your overall cost of living. Here is what you need to consider when calculating your living expenses:

• Clothing and groceries.
• Landline phone, mobile phone, internet.
• Health costs, including optical, dental and health insurance. 
• Insurance, including home and contents, building, car, life and income protection.
• Property costs like council rates, gas, water, electricity and maintenance.
• Transportation costs, including petrol, vehicle servicing and registration, and public transport.
• Education and services, including private school fees, childcare, cleaning and gardening. 
• Entertainment and recreation, including Pay TV, gym membership, sporting fees, etc. 

Once you’ve thought about, and gathered all of the relevant information above, you’re ready to take the next step and apply.

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