One of the biggest fears of first home buyerseverywhere, is that they may never get on to the property ladder at all.This is a real social stigma in Australia where 70% of people own, or arebuying their own homes.

The Federal Government's ?First Home Owner? grantthat was increased in October 2008 has encouraged a flood of calls to mortgagebrokers. Young hopefuls are looking to take advantage of the grant to make thatfirst big step toward a place of their own. Unfortunately the grant ends onJune 30^th 2009 although mortgage brokers are lobbying for asix-month extension of the grant. There was very little interest in first homebuying through 2008 until the grant went up. So it was just the reassurance andencouragement that first home buyers needed to overcome their reticence.

A second equally large fear for first home buyers isthe fear of failure. The fear of making a big financial mistake that could endup in bankruptcy and foreclosure. Clare McGrath a 28-year-old laboratorymanager put it this way. ?Dave and mehave wanted a place of our own for years now and have been saving towards it.But how safe were our jobs and what could we afford? How far should we stretchour budget to get a home we would love? The mortgage market can be veryconfusing and frightening to first home buyers who will probably only buy 2 orperhaps 3 houses in their lives.

Clare again explains. ?We did well in finding a mortgage broker who understood our situationand took us through a very complete and interesting financial health check. Hehelped us look at our incomes and expenses. He gave us good estimates of ourmortgage repayments based on our ability to service a home loan. He took intoaccount all of our assets and liabilities and our precious deposit. We hadnever realized before how much our mortgage depended on so many things?

35% is the magic figure that should reassure firsthome buyers and give them the best guide to what they can afford with minimalrisk of getting into trouble of the foreclosure kind. No first time buyershould take on repayments that are more than 35% of their weekly pre taxincome. All responsible mortgage brokers will advise their clients in this wayand will use sophisticated mortgage calculator software to judge first homebuyer affordability.

To get a first home mortgage loan you must own more than youowe. Lenders will look carefully at your existing assets and liabilities.Assets including things such as furniture, vehicles, savings and investmentsyou may have accumulated over the years. Lenders will look at your creditrecord to determine whether you are likely to default on the repayments.Factors such as your occupation, work record, where you live and your record asa tenant, are used to build a credit profile. Your credit risk can influencehow much you can borrow.

A third fear for first home buyers is getting thetiming right for their entry into the market. Many first home buyers held backin the first three quarters of 2008 out of uncertainty and fear that houseprices would continue to fall.  The FirstHome Owner grant is definitely reversing that trend. In contrast to this manyfirst home buyers are afraid not to jump in and buy as soon as they are in aposition to do so because house price inflation is relentlessly movingaffordable homes out of their financial reach. In reality there is some truthand a lot of rubbish talked about house prices generally. The only way forfirst home buyers to overcome their fears is to get expert advice in the wayClare and Dave did.