Last updated 21 June 2016
Government assistance with buying a home
A buyer of a first home may be eligible to obtain government assistance. As government schemes offering assistance may vary from time to time, enquiries should be made to discover the exact level of assistance that may be available depending on the buyer’s individual circumstances. Details of the Great Start Grant can be found on the website of the Office of State Revenue.
Obtaining a loan from a lender
The traditional method of buying a home is with a housing loan from a lender. Loans may be obtained from banks, building societies, credit unions, finance companies, some insurance companies and other forms of lending entities. Special loans are available in certain circumstances. For example, the Commonwealth Department of Veterans’ Affairs manages a range of home loan subsidy schemes, and people on lower incomes or other targeted groups may be entitled to a range of housing services and loan schemes offered by the Queensland Department of Housing and Public Works.
The loan will almost always be secured by a mortgage over the property to be purchased. The potential home buyer should try to get some idea about the availability of such loans and the rates of repayment before entering a contract to purchase a property.
Subject to finance clauses
Lenders will usually give a general idea of their eligibility criteria before a contract of sale is signed. However, most lenders in Queensland require a copy of the signed contract before they will actually approve a particular loan. One reason for this is that they need to assess whether a mortgage over the new home will be an adequate security for the loan.
Because this assessment is made after the contract is signed, it is necessary to have a condition in the contract that it is subject to the buyer obtaining the necessary finance. Great care needs to be exercised when completing this clause. Inadequate subject to finance clauses cause many problems for buyers who have rushed into signing a contract.