Quick tips to buy off-the-plan property as Defence members

Buying your first home is an exciting milestone, especially for Australian Defence Force members who have dedicated their careers to serving our country. Off-the-plan properties present unique opportunities for first home buyers, offering modern amenities and potential capital growth. However, the application process requires careful consideration of your financial situation and understanding of specialised lending options.

Understanding Off-the-Plan Property Purchases

Off-the-plan properties are homes sold before construction is complete, often requiring a deposit upfront with settlement occurring months or even years later. For Defence Force members, this purchasing method can offer several benefits:

• Potential property market growth during the construction period
• Modern fixtures and fittings in new developments
• Stamp duty concessions available in some states
• Time to improve your borrowing capacity before settlement

The extended settlement period allows you to strengthen your financial position while the property is being built.

Home Loan Options for Defence Members

Defence Force personnel have access to home loan options from banks and lenders across Australia, including specialised packages designed for military members. These often include:

1. Reduced interest rate discounts compared to standard home loans
2. Waived or reduced lenders mortgage insurance (LMI) even with lower deposits
3. Higher loan to value ratio (LVR) allowances
4. Streamlined application process recognising stable Defence employment

When applying for a home loan for an off-the-plan property, lenders will assess your current financial situation, including bank statements, income stability, and borrowing capacity.

First Time Home Buyer Programs and Grants

First home buyers in the Defence Force can access various government schemes:

Home Guarantee Scheme: This program allows eligible first-time buyers to purchase with as little as 5% deposit while avoiding LMI costs.

First Home Owner Grants (FHOG): State-based grants providing financial assistance, with amounts varying by location. Off-the-plan purchases often qualify for these programs.

First time home buyer schemes may also include stamp duty concessions, particularly beneficial for new construction purchases.

Interest Rate Considerations

When securing finance for off-the-plan properties, you'll need to choose between:

• Variable interest rate: Fluctuates with market conditions, potentially offering lower rates initially
• Fixed interest rate: Provides certainty for budgeting, protecting against rate rises during construction

Many Defence members opt for split loans, combining both rate types to balance security and flexibility.

The Application Process for Off-the-Plan Finance

To apply for a home loan for off-the-plan property:

1. Get pre-approved before signing any contracts
2. Provide current bank statements and income documentation
3. Consider future borrowing capacity at settlement time
4. Factor in potential interest rate changes during construction

Pre-approval gives you confidence when negotiating with developers and secures your loan amount based on current circumstances.

Additional Financial Benefits

Defence-specific lending packages often include:

• Offset account options to reduce interest payments
• Fee waivers on establishment and ongoing costs
• Investment loan options if you're considering your first investment property
• Access to banks and lenders nationwide, crucial for Defence members who relocate frequently

These benefits can significantly reduce the overall cost of buying a home, making homeownership more achievable on a Defence salary.

Planning for Settlement

Off-the-plan purchases require careful financial planning for the settlement period. Your circumstances may change during construction, affecting your ability to complete the purchase. Consider:

• Potential posting changes and relocation requirements
• Income variations or career progression
• Interest rate movements affecting repayment capacity
• Property market conditions at completion

Maintaining regular contact with your mortgage broker ensures your finance remains suitable as settlement approaches.

Buying an off-the-plan property as your first home can be rewarding with proper planning and specialised finance solutions. Defence Force members have access to unique lending benefits that make homeownership more achievable, even with the complexities of off-the-plan purchases.

Call one of our team or book an appointment at a time that works for you to discuss your off-the-plan property finance options.