First Home Buyer’s Guide: Everything You Need to Know About Getting a Mortgage

Buying your first home is an exciting milestone, but navigating the mortgage process can be overwhelming. From understanding loan types to securing a home loan pre-approval, this guide will walk you through the steps.

Step 1: Assess Your Financial Readiness

Before applying for a home loan, it’s important to understand your financial situation. Lenders assess several factors when determining how much they’ll lend you. We can help you understand your financial readiness.

✅ Credit Score: A higher credit score (above 600) can help secure better interest rates.

✅ Savings for a Deposit: Most lenders require a minimum 5-10% deposit, but 20% avoids Lenders Mortgage Insurance (LMI).

✅ Debt-to-Income Ratio: Your total debt repayments shouldn’t exceed 30-40% of your income.

✅ Additional Costs: Factor in stamp duty, conveyancing fees, and moving costs.

💡 Tip: Our borrowing calculator estimates how much you can afford.

Step 2: Understand First-Home Buyer Government Grants and Schemes

There are different types of first-home buyer incentives to help make homeownership more affordable:

State Grants and Schemes:

🏡 First Home Owner Grant (FHOG): A one-off grant (amount varies by state) for first-time buyers purchasing or building a new home.

🏡 Stamp Duty Concessions: Many states waive or discount stamp duty for first-home buyers.

🏡 First Home Super Saver Scheme (FHSSS): Withdraw voluntary superannuation contributions to boost your deposit.

Federal Government Schemes:

🏡 First Home Guarantee (FHBG): supporting eligible home buyers to buy a home sooner, with a deposit as little as 5%.

🏡 Regional First Home Buyer Guarantee (RFHBG): supporting eligible regional home buyers to buy a home sooner, in a regional area, with a deposit as little as 5%.

🏡 Family Home Guarantee (FHG): supporting eligible single parents and eligible single legal guardians of at least one dependent to buy a home sooner, with a deposit as little as 2%.

🏡 First Home Super Saver Scheme (FHSSS): Withdraw voluntary superannuation contributions to boost your deposit.

💡 Tip: Check your eligibility for these schemes by booking an obligation free consultation with us.

Step 3: Get Pre-Approved for a Home Loan

A home loan pre-approval helps you understand your borrowing limit and strengthens your position when making an offer on a property.

Documents typically needed for pre-approval:

• Proof of income (e.g. recent payslips)

• Bank statements showing savings & expenses

• Employment verification

• Credit history review

💡 Tip: We can find the best deal for you, compare interest rates and loan features from different banks. Have a chat with our experienced broker, Robert.

Step 4: Choose the Right Home Loan

There are several home loan types to consider:

✅ Variable Rate Home Loan: Interest rates fluctuate with the market, offering flexibility.

✅ Fixed Rate Home Loan: Locks in an interest rate (1-5 years), providing stability in repayments.

✅ Split Loan: A combination of variable and fixed rates to balance flexibility and security.

✅ Low-Deposit Loan: Allows you to buy with a smaller deposit but may require LMI.

✅ Offset Account: A linked savings account that reduces the interest payable on your home loan.

💡 Tip: We will help you understand features like extra repayments, redraw facilities, or offset accounts to save on interest.

Step 5: House Hunting and Making an Offer

Once pre-approved, you can start searching for a property within your budget. When you find the right home, you’ll need to:

• Get a Contract of Sale: Your conveyancer will review the legal terms.

• Negotiate Price & Conditions: You can negotiate with the seller on price, settlement terms, or repairs.

• Pay a Deposit: Typically 5-10% of the purchase price upon signing the contract.

💡 Tip: Our broker can provide a market report to help determine property values in the area you are looking at.

Step 6: The Home Loan Approval & Settlement Process

Once your offer is accepted, your lender will conduct final checks before approving the loan.

Key Steps in the loan approval process:

✔️ Valuation: The lender assesses the property’s value.

✔️ Final Loan Approval: Once approved, you’ll sign loan documents.

✔️ Settlement: The bank transfers funds to the seller, and you officially take ownership!

💡 Tip: Your conveyancer will handle most of the legal work during settlement.

Step 7: Move In and Manage Your Mortgage

Congratulations! 🎉 You’re officially a homeowner! Now, it’s time to focus on managing your mortgage effectively.

✅ Set Up Automatic Repayments: To avoid missing payments and maintain a strong credit score.

✅ Make Extra Repayments: Even small additional payments can reduce interest and shorten your loan term.

✅ Review Your Loan Regularly: Interest rates change, so consider refinancing if better deals become available.

💡 Tip: As part of our ongoing service, our broker will conduct a review of your loan.

Robert Owen, Senior Mortgage Broker

Looking for expert advice?

Get in touch with our trusted broker, Robert, today. Call 0414 941 115 or email rob@loanstriker.com.au to discuss your options.

If you prefer, book an appointment online.