Buying a House for the First Time? Here’s How to Get Started

Key Takeaways

• Understand your financial position before starting your home buying journey
• Set a realistic budget that includes all upfront and ongoing costs
• Save for a deposit and explore government schemes to boost your buying power
• Get pre-approval to know your borrowing capacity and show sellers you’re serious
• Research the property market and attend open homes to get a feel for prices
• Seek expert advice from professionals like mortgage brokers and conveyancers
• Prepare for unexpected costs and stay flexible throughout the process
• Celebrate each milestone and enjoy the journey to home ownership
  
  

Embarking on the journey to buy your first home can feel overwhelming, but knowing the crucial first step can set you on the right path.

Buying your first home is a milestone that’s equal parts exciting and overwhelming. For many, it’s the biggest financial decision they’ll ever make. At Mountway Finance, we understand that the process can feel daunting, especially with so much information (and misinformation) out there. That’s why we’re here to guide you through every step, making sure you feel confident and supported from the moment you start dreaming of home ownership to the day you pick up the keys.

Whether you’re just starting to think about buying or you’re ready to take the plunge, this guide will walk you through the essential steps, tips and considerations for first home buyers in Australia.

Understand Your Financial Position

Before you start browsing property listings or attending open homes, it’s crucial to get a clear picture of your finances. This means looking at your income, expenses, debts and savings. Lenders will want to see that you have a stable income and a good track record of managing money. Take the time to review your bank statements, credit card balances and any personal loans. If you have outstanding debts, consider paying them down to improve your borrowing power.

It’s also wise to check your credit score. A healthy credit score can make a big difference to the types of loans and mortgage rates available to you. If your score isn’t where you’d like it to be, don’t panic—there are steps you can take to improve it over time. Remember, some lenders may look at both your individual and joint credit scores if you’re buying with a partner.

Set a Realistic Budget

Once you know where you stand financially, it’s time to set a budget. This isn’t just about how much you can borrow, but how much you’re comfortable repaying each month. Remember, home ownership comes with extra costs beyond the mortgage—think stamp duty, legal fees, building and pest inspections, insurance and ongoing maintenance.

You’ll also need to factor in closing costs, which can include lender fees, title insurance and government charges. Use online calculators to get a sense of what your repayments might look like at different loan amounts and interest rates. Be honest with yourself about your lifestyle and spending habits. It’s better to buy within your means and enjoy your new home, rather than stretching yourself too thin and feeling stressed.

Save for a Deposit (and More)

Saving for a deposit is often the biggest hurdle for first home buyers. In Australia, most lenders require a minimum deposit of 5–20% of the property’s purchase price. The more you can save, the better your chances of securing a competitive loan and avoiding lenders mortgage insurance (LMI), sometimes referred to as private mortgage insurance. LMI is usually required if your deposit is less than 20% of the home price, and it protects the lender—not you—if you default on your loan.

Don’t forget to budget for other upfront costs, such as stamp duty, conveyancing, home appraisal, loan application fees and moving expenses. Some government schemes, like the First Home Owner Grant or Help to Buy, can help boost your deposit or reduce costs, so it’s worth exploring what you might be eligible for.

Get Pre-Approval

Pre-approval (sometimes called conditional approval) is a lender’s indication of how much they’re willing to lend you, based on your financial situation. It’s not a guarantee, but it gives you a clear price range to work within and shows sellers you’re a serious buyer.

To get pre-approval, you’ll need to provide documents like payslips, bank statements and proof of savings. Working with a mortgage broker, like the team at Mountway, can make this process smoother and help you compare options from different lenders. This is also a good time to discuss the types of loans available, such as variable or fixed mortgage rates, and whether you might be eligible for government-backed loans if you’re a permanent resident or citizen with special circumstances.

Research the Market

With your budget in mind, start researching the property market in your preferred areas. Look at recent sales, median home prices and trends. Consider what’s important to you—proximity to work, schools, public transport, lifestyle amenities or future growth potential.

Attend open homes and auctions to get a feel for what’s available and how much properties are selling for. Don’t be afraid to ask questions or seek advice from local agents. The more informed you are, the more confident you’ll feel when it’s time to make an offer.

Understand the Buying Process

The process of buying a home involves several steps, each with its own paperwork and deadlines. Here’s a quick overview:

Make an offer: Once you find a property you love, you’ll submit an offer to the seller (usually through the agent). If your offer is accepted, you’ll sign a contract of sale.

Pay a deposit: This is typically 5–10% of the purchase price and is held in trust until settlement.

Arrange inspections: Building and pest inspections are highly recommended to uncover any hidden issues. You may also want to consider a home appraisal to ensure you’re paying a fair price.

Finalise your loan: Your lender will conduct a valuation and, if all goes well, issue formal loan approval.

Settlement: This is when the property officially changes hands and you receive the keys.

Each state and territory has its own rules and timelines, so make sure you understand what applies in your area. It’s also important to consider title insurance, which can protect you against certain legal risks related to property ownership.

Don’t Go It Alone – Seek Expert Advice

Buying your first home is a big deal, and you don’t have to navigate it alone. Surround yourself with trusted professionals who can guide you through the process. This might include a mortgage broker, solicitor or conveyancer, building inspector and financial adviser.

A good mortgage broker will help you compare loan products, explain the fine print and negotiate with lenders on your behalf. At Mountway, we pride ourselves on being your advocate, making sure you get the best deal for your needs and circumstances. You may also want to discuss income protection insurance, which can provide peace of mind if your circumstances change unexpectedly.

Take Advantage of Government Schemes

There are several government initiatives designed to help first home buyers get into the market. These include the First Home Owner Grant, stamp duty concessions, the First Home Guarantee and the Help to Buy scheme. Eligibility criteria and benefits vary by state, so it’s important to do your research and see what you might qualify for.

These schemes can make a significant difference to your upfront costs and long-term affordability, so don’t leave money on the table.

Prepare for the Unexpected

Even with the best planning, surprises can pop up during the home buying journey. Maybe a building inspection uncovers issues, or your loan approval takes longer than expected. Stay flexible and keep a buffer in your budget for unexpected expenses.

Remember, the property market can move quickly. If you miss out on a home, don’t be discouraged—there will be other opportunities. Patience and persistence are key. Your property journey may have a few twists and turns, but each step brings you closer to your goal.

Enjoy the Journey

Buying your first home is a significant achievement, and it’s important to celebrate the milestones along the way. From saving your deposit to getting pre-approval, making an offer and finally moving in, each step brings you closer to your goal.

Take the time to enjoy the process and don’t be afraid to ask for help when you need it. At Mountway Finance, we’re here to support you every step of the way, offering expert advice and a friendly ear whenever you need it. For those with unique needs, such as properties with pools, it’s worth checking with the Pool Safety Council in your state to ensure your new home meets all safety requirements.

The journey to home ownership can feel overwhelming, but with the right guidance and preparation, it’s absolutely achievable. By understanding your finances, setting a realistic budget, seeking expert advice and making the most of available support, you’ll be well on your way to buying your first home.