Understanding the Basics of Purchasing Units in Ellenbrook

What Makes Units an Attractive Option for First Home Buyers

For many first home buyers in Ellenbrook, purchasing a unit represents an accessible entry point into the property market. Units typically come with a lower purchase price compared to standalone houses, making them particularly appealing when you're working with a limited first home buyer budget. The reduced maintenance responsibilities and often lower ongoing costs can make unit ownership more manageable for those buying your first home.

When considering buying an apartment vs buying a house, units offer several distinct advantages. Strata fees usually cover building insurance, garden maintenance, and common area upkeep. This arrangement can provide peace of mind, especially if you're balancing work commitments with homeownership responsibilities.

First Home Buyer Eligibility and Grants

Before beginning your property search, understanding your first home buyer eligibility is essential. Western Australia offers several schemes designed to assist those entering the property market. The first home owner grants (FHOG) can provide financial support, though eligibility criteria and grant amounts vary based on property type and value.

The First Home Loan Deposit Scheme has helped many Australians purchase property with a smaller deposit. Through this initiative, eligible first home buyers can secure a home loan with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). The Regional first home buyer Guarantee may also apply to properties in certain areas, offering additional support.

Key eligibility requirements typically include:

• Being an Australian citizen or permanent resident
• Being at least 18 years of age
• Never having owned property in Australia
• Meeting income thresholds
• Intending to live in the property as your primary residence

Understanding First Home Buyer Stamp Duty Concessions

First home buyer stamp duty concessions in Western Australia can result in significant savings. These concessions reduce or eliminate the stamp duty payable on your property purchase, potentially saving you thousands of dollars. The concessions apply to both vacant land and established properties, though the thresholds differ.

For units specifically, understanding the property value limits is important. If your chosen unit falls within the eligible price range, you could receive a full or partial exemption on stamp duty. This saving can be redirected toward your deposit, furniture, or moving costs.

Home Loan Options for Unit Purchases

When applying for a home loan to purchase a unit, you'll encounter various home loan options tailored to different circumstances. Understanding these choices forms a crucial part of your first home buyer checklist.

Low Deposit Options

Many first home buyers worry about saving a substantial deposit. Fortunately, low deposit options exist for those with limited savings. A 5% deposit scheme allows you to enter the market sooner, while 10% deposit options are also widely available. Some lenders accept a gift deposit from family members, which can supplement your savings.

These options typically require you to pay Lenders Mortgage Insurance (LMI), though some lenders offer LMI waivers for certain professionals or through specific schemes.

Interest Rate Considerations

The interest rate you secure significantly impacts your repayments over the life of your loan. When exploring home loan application options, you'll choose between:

• Fixed interest rate: Locks in your rate for a set period (typically 1-5 years), providing repayment certainty
• Variable interest rate: Fluctuates with market conditions, offering flexibility and potential interest rate discounts

Many first home buyers opt for a split loan, combining both fixed and variable portions to balance security with flexibility.

Valuable Loan Features

When comparing home loan options, consider features that add value:

• Offset account: Links to your home loan, with the balance offsetting your loan amount when calculating interest
• Redraw facility: Allows access to additional repayments you've made above the minimum requirement
• Extra repayments: The ability to pay more than required without penalties

The First Home Loan Application Process

Applying for your first home loan involves several steps. Starting with getting loan pre-approval provides clarity on your borrowing capacity and strengthens your position when making offers.

The pre-approval process involves:

1. Gathering financial documents (pay slips, tax returns, bank statements)
2. Completing a home loan application
3. Undergoing a credit assessment
4. Receiving conditional approval

Pre-approval typically lasts 3-6 months, giving you time to find the right unit within your budget.

Using the First Home Super Saver Scheme

The first home super saver scheme (FHSS) allows you to save money for your deposit inside your superannuation fund. You can make voluntary contributions to your super and later withdraw these amounts, along with associated earnings, to put toward buying your first home.

This scheme offers tax advantages, as contributions are taxed at the concessional rate of 15% rather than your marginal tax rate. You can contribute up to $15,000 per financial year, with a total cap of $50,000 across all years.

Important Considerations When Buying a Unit

Purchasing a unit requires additional due diligence compared to buying a house. Review the strata report carefully, examining:

• Strata fees and any upcoming special levies
• Building maintenance history and sinking fund balance
• Strata rules and by-laws
• Insurance coverage
• Meeting minutes for any disputes or issues

Understanding these factors helps you make an informed decision and avoid unexpected costs after settlement.

Working with a Mortgage Broker in Ellenbrook

A mortgage broker can guide you through the complexities of buying your first home. Brokers have access to multiple lenders and can compare interest rate discounts, loan features, and terms to find options suited to your circumstances. For those buying your first home in Ellenbrook, local knowledge can be invaluable.

Brokers also assist with the first home loan application process, helping you gather required documentation and present your application favourably to lenders. Their expertise can save you time and potentially secure better loan terms.

Creating Your First Home Buyer Checklist

As you prepare to purchase your first unit, maintain a comprehensive first home buyer checklist:

• Assess your savings and determine your deposit amount
• Research first home buyer eligibility for government schemes
• Calculate your borrowing capacity
• Obtain pre-approval
• Research suburbs and property types
• Attend inspections and review strata reports
• Arrange building and pest inspections
• Engage a conveyancer or solicitor
• Finalise your home loan
• Plan for settlement costs

Taking the Next Step

Purchasing your first unit in Ellenbrook represents an exciting milestone. With various schemes, grants, and low deposit options available, homeownership is more accessible than ever for eligible first home buyers. Understanding your home loan options, from interest rate types to loan features like offset accounts and redraw facilities, empowers you to make informed decisions.

At Simple Lending, we specialise in helping first home buyers throughout their journey. Whether you're exploring the First Home Loan Deposit Scheme, need assistance with your first home loan application, or want to understand your borrowing capacity, our team is here to help.

Call one of our team or book an appointment at a time that works for you to discuss your first home buyer options and take the first step toward owning your unit in Ellenbrook.