Proven tips to purchase your first unit as an ACT employee

Understanding Your Position as a First Home Buyer

As an ACT Government employee, you're in a solid position when applying for a home loan. Your stable employment and regular income give you access to Home Loan options from banks and lenders across Australia. When buying your first home, particularly a unit, there are several factors that work in your favour.

Public servants often have consistent employment history, which lenders value highly. This stability can help you secure more favourable terms and potentially access to banks and lenders nationwide that specifically cater to government employees.

First Time Home Buyer Programs and Schemes Available

The Australian government offers several first time home buyer programs designed to help you enter the property market:

• Home Guarantee Scheme: Allows eligible first home buyers to purchase with as little as a 5% deposit without paying lenders mortgage insurance (LMI)
• First home owner grants (FHOG): Available for new builds and varies by state
• Stamp duty concessions: Significant savings available for first home buyers in the ACT
• First time home buyer schemes: Various state-based initiatives that can reduce upfront costs

These programs can substantially reduce the financial burden when buying a home, making unit ownership more achievable on a public servant's salary.

Why Units Make Sense for First Home Buyers

Units often represent an ideal entry point into the property market. They typically require a lower loan amount compared to houses, meaning your borrowing capacity can stretch further. The ACT property market offers diverse unit options, from modern apartments in Gungahlin to established units in inner suburbs.

When considering your financial situation, units generally have lower purchase prices, reduced maintenance responsibilities, and often include amenities like gyms or pools that would be costly to maintain privately.

Interest Rates and Loan Structure Options

Your interest rate will significantly impact your monthly repayments and total loan cost. As a government employee, you may qualify for interest rate discounts through certain lenders who offer packages specifically for public servants.

Consider these loan structure options:

• Variable interest rate: Fluctuates with market conditions but often starts lower
• Fixed interest rate: Provides certainty for a set period, typically 1-5 years
• Split loans: Combine both variable and fixed portions
• Offset account: Link your savings to reduce interest on the outstanding loan balance

Each option has benefits depending on your circumstances and risk tolerance.

The Application Process and Getting Pre-Approved

To apply for a home loan, you'll need to provide various documents including recent pay slips, bank statements, and employment confirmation. The streamlined application process for government employees often moves faster due to income verification processes.

Getting pre-approved before you start shopping gives you:

1. Clear understanding of your borrowing capacity
2. Confidence when making offers
3. Faster settlement once you find the right unit
4. Better negotiating position with sellers

Understanding Loan to Value Ratio (LVR)

Your loan to value ratio (LVR) represents how much you're borrowing compared to the property's value. A lower LVR generally means:

• Lower interest rates
• Avoiding LMI (if LVR is 80% or below)
• More loan options
• Stronger application

For units, lenders may have specific LVR requirements, particularly for high-density developments or off-the-plan purchases.

Investment Considerations for the Future

While you're buying your first home to live in, consider how it might work as an investment property later. Some buyers purchase their first unit with a view to eventually using it for rental income when they upgrade to a larger property.

If you're considering investment loan options down the track, starting with a well-located unit can provide a foundation for building a property portfolio. The investment loan application process will be familiar, and you'll already have experience with property ownership.

Taking the Next Step

Purchasing your first unit as an ACT Government employee comes with distinct advantages. Your stable employment, access to various first time home buyer programs, and the support of experienced mortgage brokers who understand the public service can make the process smoother.

Remember to factor in all costs including stamp duty, legal fees, building inspections, and ongoing strata fees when calculating your budget. With proper planning and the right loan structure, unit ownership can be an achievable goal.

Call one of our team or book an appointment at a time that works for you to discuss your specific situation and explore the loan options available to ACT Government employees.