Do you have lots of questions about buying a home? You’re not alone. Home buying is a major financial decision that can drastically affect your life so it makes sense to ask questions to help you prepare. Plus, you might encounter unfamiliar terms and complicated processes that can leave you needing help.

Some of the frequently asked questions of homebuyers are best answered in a one-to-one conversation with experts - that’s why we’re here for you and you can talk to us at Fastgrow Finance. But we also compiled and answered some of your Frequently Asked Questions here to serve as your quick guide into the homebuying process.

How much can I borrow for a home loan?

The amount you can borrow for a home loan in Australia depends on several factors, including your income, expenses, credit score, and the type of property you're purchasing.

Here are a few key metrics to consider:

Debt-to-income ratio (DTI): This is the percentage of your monthly income that goes towards paying off existing debts, such as credit cards, car loans, and personal loans. Most lenders prefer a DTI of 43% or lower.

Loan-to-value ratio (LVR): This is the percentage of the property's value that you're borrowing. Most lenders consider an LVR of 80% as risky, meaning you’ll need to have an LVR of lower than 80% and come up with a deposit of at least 20% of the property's value.

Interest rate: The interest rate on your home loan will also affect how much you can borrow, as a higher interest rate will result in higher repayments.

It’s a good idea to speak to a mortgage broker or lender to get a more accurate estimate based on your individual circumstances.

What are the different types of home loans that I can choose from? Which one is the best for me?

Here are some of the most common types of home loans that you can choose from:

Variable rate home loan: A variable rate home loan has an interest rate that can fluctuate over time, usually in response to changes in the Reserve Bank of Australia's cash rate. This means your repayments can go up or down depending on the interest rate movements.

Fixed rate home loan: A fixed rate home loan has an interest rate that stays the same for a set period, usually between one and five years. This means your repayments will remain the same during this period, regardless of interest rate movements.

Split rate home loan: A split rate home loan allows you to split your loan into two parts - one with a fixed interest rate and the other with a variable interest rate. This can offer the security of fixed rate repayments, while still taking advantage of any interest rate reductions.

Interest-only home loan: With an interest-only home loan, you only need to make repayments on the interest portion of the loan for a set period, usually between one and five years. This can help reduce your repayments in the short term, but you'll need to make principal repayments eventually.

Line of credit home loan: A line of credit home loan allows you to access funds as you need them, up to a set credit limit. This can be useful for renovating or investing, but it's important to be disciplined with your spending.

Low doc home loan: A low doc home loan is designed for self-employed borrowers who may not have traditional income documentation, such as tax returns or financial statements, to support their loan application.

Reverse mortgage: A reverse mortgage is a loan that allows homeowners aged 60 and over to borrow money against the equity in their home. The loan is repaid when the property is sold or when the borrower dies or moves out of the property.

The best type of home loan for you will be determined by evaluating your preferences and current financial situation. It's important to carefully consider your options and seek professional advice before selecting a home loan.

How much deposit do I need for a home loan?

Most lenders require a deposit of at least 10% of the purchase price of the property, but it’s best to aim for 20%. This is because if you're borrowing more than 80% of the property's value, you may also be required to pay lenders mortgage insurance (LMI). It is a type of insurance that protects the lender in case you're unable to make your repayments.

How does the First Home Owner Grant work?

The First Home Owner Grant (FHOG) is a one-time payment provided by the Australian government to first-time homebuyers who meet certain eligibility criteria. The amount of the FHOG can vary depending on the state or territory in which you're buying your property, as well as the value of the property. In general, the FHOG is a lump-sum payment of between $7,000 and $20,000, although some states offer higher amounts for properties in regional or remote areas.

To be eligible for the FHOG, you must meet the following criteria:

You must be an Australian citizen or permanent resident.

You must be a first-time homebuyer, meaning you've never owned property before.

You must be purchasing or building a new home, or in some cases, a substantially renovated home.

You must be buying the property as an individual, not as a company or trust.

You must be planning to live in the property as your principal place of residence for a minimum period.

To apply for the FHOG, you'll need to submit an application to the relevant state or territory authority, along with supporting documentation such as proof of identity, proof of income, and evidence of your property purchase or building contract.

How does stamp duty work and how much will I need to pay?

Stamp duty is a tax levied by state and territory governments on certain transactions, including property purchases. The amount of stamp duty you'll need to pay can vary depending on a range of factors, including the state or territory in which you're buying the property, the purchase price of the property, and whether you're a first-time homebuyer or not.

In general, stamp duty is calculated as a percentage of the purchase price of the property. The rate of stamp duty can also vary depending on the value of the property, with higher rates typically applying to more expensive properties. To help you out, you may check out and try our stamp duty calculator on our website.

What is loan pre-approval and why is it important?

Loan pre-approval is the process by which a lender assesses your financial situation and creditworthiness to determine how much money they are willing to lend you for a home loan, based on the information you provide.

There are several benefits to obtaining loan pre-approval including helping you understand your borrowing capacity, increase your negotiating power and confidence, and speed up the application process.

Pre-approval is typically valid for a specific period of time, such as 90 days, during which you can search for properties and make an offer with the knowledge that you are likely to be approved for the loan.

What should I look for when inspecting a property?

Inspecting a property is an important step in the home buying process, as it can help you identify any potential issues or areas of concern before making an offer. Here are some things to look for when inspecting a property:

Structural integrity: Check the foundation, walls, roof, and floors for any signs of cracks, dampness, or damage. Look for any signs of termite or pest damage, as this can be a costly issue to fix.

Plumbing and electrical systems: Test the water pressure and check for any leaks or water damage. Turn on lights, appliances, and power points to check the electrical system.

Heating and cooling systems.

Outdoor areas: Check for any damage or safety hazards, such as unstable decking or loose steps.

Noise and traffic: Pay attention to any noise or traffic in the area, as this can impact your quality of life and resale value.

Building permits and compliance: Check that any renovations or additions to the property have been completed with the appropriate building permits and comply with local regulations.

What is the process for settling on a property?

Property settlement is the legal process in which the transfer of ownership of a property from one party to another is formalised. In Australia, the process is typically handled by conveyancing professionals, such as solicitors or conveyancers. Read our blog on the property settlement process for a more thorough explanation.

What are the best suburbs to buy a home in?

The answer to this question will likely vary for each person as it depends on your preferences, needs, and financial situation. Here are some general factors to consider when choosing a suburb to buy a home in:

Location: Consider the suburb's proximity to work, public transportation, schools, shops, and other amenities.

Affordability: Look for suburbs within your budget, and consider factors such as property values, average rent, and median income levels.

Growth potential: Research the suburb's historical property value growth and future development plans to assess its potential for capital growth.

Safety: Look for suburbs with low crime rates and a reputation for safety.

Lifestyle: Consider the suburb's overall lifestyle, including the local culture, community, and recreational opportunities.

Future developments: Research any upcoming developments or infrastructure projects in the area, such as new roads or public transport, as these can impact property values and livability.

It's important to do your research and work with a trusted real estate agent who has local knowledge and experience in the areas you're considering. They can help guide you through the process and provide insights into the local market.

Need exact answers to your home loan or home buying questions?

Let's talk about your financial goals and the solutions suitable for you. We can help you find the best loan available in the market.

Please get in touch with us directly. Our knowledgeable advisors and trusted brokers will work with you to determine your objectives and screen and help select a provider that meets your needs.

Contact us through the following channels:

• Phone: (02) 9630 3142
• Email: [email protected]