FAQs for first home buyers

A Variable rate can change anytime and will effect your fortnightly or monthly payments. But a Fixed rate has been fixed at a certain rate, so it stays the same for the entire fixed rate period. Consequently, your repayments also stay the same for the same 'fixed' period. At ING DIRECT you can fix your loan for a period of 1 to 5 years.

Interest is calculated daily on the outstanding balance of your loan. You can reduce your interest payments simply by making extra repayments with some types of loans or by depositing lump sums or additional funds into your mortgage account to reduce the balance. (On certain home loans you may be able to redraw this money if and when you need it.)

With an Interest Only mortgage, for a period of up to 5 years, your repayments will only cover the interest on the mortgage. At the end of this time you'll still owe the full amount you borrowed. The main advantage is that you're minimising your payments for this period, so it's a great loan for people who are borrowing to invest.

Redraw lets you withdraw the additional money over and above your existing scheduled payments that you've already paid into your mortgage. With Internet or phone banking you can access your account to check your balance, make extra repayments, redraw funds and review transactions.

If you're borrowing 80% or more of the value of your property you're required to have Lenders Mortgage Insurance. It's the insurance the bank takes out for the mortgage to protect the bank, rather than the individual should you default on the loan. It also allows the borrower to get into the market with a deposit of less than 20%.

To be eligible for the $7000 First Home Owners Grant you and your spouse should not have previously owned a home or claimed the grant. For more details please visit www.firsthome.gov.au

If you're buying a property with someone else you can still get the First Home Owners Grant providing all the co-purchasers are eligible to receive it.

This is simply an indication of your ability to borrow – it isn't an approval or a mortgage offer. ING DIRECT have an online 2 minute pre-approval form that gives you an indication of how much you can borrow.

The time between exchanging contracts and settlement varies. Four to six weeks is normal. Settlement time is usually dictated by the seller and the bank providing the mortgage, but is negotiated with the buyer.

It's a good idea to have a lawyer or conveyancer. When you've found a property get the agent to send the Contract of Sale to a lawyer or conveyancer for review. They will also help with the settlement process and exchange of title documents.

The process of buying a property includes:

• Calculate your deposit
• Calculate your borrowing capacity
• Choose the mortgage that best suits you
• Get pre-approval
• Formal approval and settlement.

At ING DIRECT you receive your own dedicated Home Loan Specialist who will help you through the whole process from application through to settlement.

Conveyancing is the process where a property is transferred from one party to another. It's usually done either by a solicitor, a conveyancer, or by buying a do-it-yourself conveyancing kit.

It gives you the following information:

• Whether or not the strata scheme is adequately insured.
• Any regular or special levies.
• What renovations and maintenance have been completed?
• Any evidence of potentially expensive building or structural problems that need fixing.
• Whether or not the strata scheme has adequate reserve of funds.
• Evidence of how well owners work together to maintain the property.
• Any strata regulations relating to renovations, refurbishment or pet ownership.

The contract of sale is a legal contract involving the exchange of a property from seller (vendor) to buyer (purchaser) for an agreed sum.

The contract of sale often includes: a sewage diagram, a copy of the certificate of title for the property, a zoning certificate from local council, copies of documents relating to any other registered interests over the property.