Pathways to home ownership in Australia
Engaging in a loan interview with Buyvest is the first step to your home buying journey. This is where we'll discuss your financial situation, needs, and goals. With over a decade of experience and as your mortgage adviser, we will help you understand every step of the process, from pre-approval to settlement.
Unlock the door with pre-approval
Securing a pre-approval is a crucial step in your home buying journey. It gives you an advantage by providing a realistic expectation of your borrowing capacity, and it shows sellers that you're a serious and prepared buyer. At Buyvest, we specialise in guiding you through the pre-approval process, ensuring that you have a strong understanding of your potential home loan options.
Understanding valuation process
Understanding the property valuation process is essential in the home-buying journey. Valuations play a pivotal role in securing finance, as they give an estimate of the property's worth, which in turn affects the loan amount a lender is willing to provide. With Buyvest, you'll gain insights into how valuations work and how they can impact your loan terms.
First Home Owner Grant (FHOG)
For many first home buyers, accumulating a deposit can be a daunting hurdle. But did you know that government grants, such as the First Home Owner Grant (FHOG), could be used to supplement your deposit? This grant can significantly reduce the amount you need to save. We at Buyvest are well-versed in these grants and can assist you in understanding how to qualify and apply for them.
Stamp Duty Concessions
Stamp duty often represents a significant portion of upfront costs when buying a home. Recognising this, various state governments offer stamp duty concessions to first-time buyers, which could lower or even eliminate these costs entirely. At Buyvest, we're dedicated to helping you understand the stamp duty concessions available to you, potentially saving you thousands of dollars and lessening your initial financial load.
Home Guarantee Scheme (HGS)
The Home Guarantee Scheme (HGS) is another supportive scheme for first home buyers. It's designed to help you purchase your home with as little as a 5% deposit without the need for Lenders Mortgage Insurance. This scheme not only fast-tracks your homeownership dreams but also maintains affordability. The experts at Buyvest are on hand to navigate you through the ins and outs of the HGS, ensuring you take full advantage of what's on offer.
Shared Equity Scheme
The Shared Equity Scheme, also known as the Help to Buy Scheme, helps eligible Australians to buy a home with a smaller deposit. The government contributes up to 40% for new homes or 30% for existing ones. At Buyvest, we’re experts at guiding you through this process - making it easier to secure your home loan and maximise your benefits under the scheme.
Guarantor loans
A guarantor loan can be a lifeline for first-time buyers who may not have the required deposit. This type of loan involves a family member, who agrees to guarantee part of your loan. It's an opportunity to enter the property market sooner, and it can also help you avoid the cost of Lenders Mortgage Insurance (LMI). Our experts at Buyvest will walk you through the process, ensuring you understand the commitments and benefits of securing a guarantor loan.
Low deposit home loans
Low deposit home loans are an option if you're ready to purchase a home but haven't saved the typical 20% deposit. With LMI, you can borrow with a smaller deposit. While LMI adds an extra cost to your loan, it enables you to embark on your homeownership without the wait. At Buyvest, we'll help you weigh the costs against the benefits, providing a clear picture of how LMI will fit into your long-term financial plan.
Using existing property equity
If you or your co-borrower already owns property, you might have built up equity that you can use towards purchasing another home. Equity release involves accessing the money tied up in your current property, providing you with the funds for a deposit on your next home. This can be a game-changer in securing your new property, and Buyvest is here to guide you through the equity release process, ensuring you make the most of your existing assets.
Loan options for first home buyers
The home loan market offers various products designed to meet the needs of first home buyers:
Fixed-rate loans: Provide payment stability with locked-in interest rates for a set period
Variable-rate loans: Offer flexibility with rates that change according to market conditions
Split loans: Combine fixed and variable components to balance stability and flexibility
Offset accounts: Reduce interest payments by offsetting your loan balance with your savings
Package loans: Bundle your home loan with other financial products for potential fee savings
The right loan structure depends on your financial situation, risk tolerance, and long-term goals.
Understanding Loan to Value Ratio (LVR)
Your loan-to-value ratio significantly impacts your loan terms and costs:
Calculated as the percentage of the property value you're borrowing
Influences interest rates and loan features available to you
Determines whether Lenders Mortgage Insurance is required
Affects your borrowing capacity and loan approval prospects
Provides a measure of your equity position in the property
Aiming for an LVR of 80% or less (20% deposit) typically provides the most favourable loan terms, though various schemes and loan products can make higher LVRs more manageable.
Budgeting for ongoing costs
Beyond the purchase price and upfront costs, homeownership involves ongoing expenses:
Mortgage repayments
Council rates and water charges
Strata fees (for apartments and some townhouses)
Home insurance
Maintenance and repairs
Utilities and services
Factoring these costs into your budget ensures you can comfortably afford your property in the long term.
Frequently asked questions
What's the first step I should take when considering buying my first home?
The first step should be a comprehensive assessment of your financial situation. This includes reviewing your income, expenses, savings, and existing debts to understand your borrowing capacity. Speaking to one of our expert’s at Buyvest can provide valuable insights into your readiness for homeownership and help identify areas to improve before applying for a loan.
How much deposit do I need to buy my first home?
While the traditional deposit is 20% of the property value, first home buyers have several options for purchasing with smaller deposits:
With the Home Guarantee Scheme, you may purchase with as little as a 5% deposit (or 2% for single parents under the Family Home Guarantee)
The Shared Equity Scheme helps eligible buyers get into the property market with as little as a 2% deposit, while the government contributes up to 30% for existing property and 40% for a brand new property
Using a guarantor loan, you might enter the market with minimal or no deposit
Low deposit loans with Lenders Mortgage Insurance allow purchases with 5-10% deposits
Some state-based initiatives provide additional support for deposit-challenged buyers
The ideal deposit size depends on your financial situation, property goals, and eligibility for various schemes.
How long does the entire home buying process typically take?
The timeline varies significantly based on individual circumstances, but a typical first home purchase might follow this approximate timeline:
Pre-approval process: 3 days to 1 weeks
Property search: 1-3 months
Contract negotiation and exchange: 1-2 weeks
Settlement period: 30-90 days (typically 42 days)
From serious property hunting to receiving your keys, the process often takes 3 months, though this can vary based on market conditions and individual circumstances.
Can I use multiple government schemes and grants simultaneously?
In many cases, yes. For example, you might be eligible to combine:
The First Home Owner Grant
Stamp duty concessions or exemptions
The Home Guarantee Scheme
Shared Equity Scheme
First Home Super Saver Scheme benefits
However, each scheme has specific eligibility criteria, and some combinations may not be possible depending on your circumstances and state-specific rules. A mortgage broker can help you identify which combinations are available to you.
What costs should I budget for beyond the property price?
Beyond the purchase price, budget for:
Stamp duty (though concessions may apply)
Legal and conveyancing fees ($1200-$2,500)
Building and pest inspections ($300-$800)
Mortgage registration and transfer fees
Loan application or establishment fees
Moving costs
Initial repairs or renovations
Furniture and appliances
These costs typically add 2-5% to your property purchase price, though first home buyer concessions can significantly reduce this amount.
How does pre-approval differ from formal approval?
Pre-approval is a preliminary assessment indicating how much a lender is willing to lend you based on the information provided. It's subject to conditions and typically valid for 3 months. Formal (unconditional) approval comes after you've found a property and the lender has verified all information, including a satisfactory property valuation. Only formal approval represents a binding commitment from the lender.
What happens if the property valuation comes in lower than my offer?
If the valuation is lower than your offer price, you have several options:
Negotiate with the seller for a lower price
Provide additional funds to cover the gap
Request a review of the valuation if you believe it's inaccurate
Seek an alternative lender who might value the property differently
Consider whether to proceed with the purchase given the valuation
A lower valuation can affect your loan-to-value ratio and potentially require additional deposit funds or Lenders Mortgage Insurance.
How do I know if I should use a guarantor loan?
Consider a guarantor loan if:
You have limited savings but strong income to service a loan
You have family members willing and financially able to provide a guarantee
You want to avoid Lenders Mortgage Insurance
You're looking to enter the market sooner rather than waiting to save a larger deposit
You understand the responsibilities and risks for both yourself and your guarantor
Both you and your potential guarantor should seek independent financial and legal advice before proceeding with this arrangement.
What's the difference between fixed and variable interest rates?
Fixed interest rates:
Remain unchanged for a set period (typically 1-5 years)
Provide certainty for budgeting and protection against rate increases
May have less flexibility and higher break costs
Often have fewer features like offset accounts
Variable interest rates:
Fluctuate with market conditions
May decrease if official interest rates fall
Typically offer more flexibility with features like offset accounts and additional repayments
Have no break costs if you decide to refinance
Many first home buyers opt for a split loan, combining both fixed and variable components to balance certainty with flexibility.
How can I improve my chances of loan approval?
To strengthen your loan application:
Maintain a clean credit history and check your credit score
Demonstrate consistent income and employment stability
Reduce existing debts and credit card limits
Save consistently to show good financial management
Prepare all documentation thoroughly and accurately
Consider using a mortgage broker to find the most suitable lender
Be realistic about your borrowing capacity and property budget
Buyvest: Your local mortgage broker
At Buyvest, we believe that informed buyers make confident homeowners. That's why we're committed to providing you personalised advice and support throughout your home-buying journey. Whether it's understanding the nitty-gritty of home loan interviews or navigating through the maze of government grants, we're here to provide the expertise you need.
We invite you to reach out and begin this exciting journey with us. Connect with Buyvest, your local mortgage broker, and take the first step towards turning your dream home into a reality. Together, we will explore the best financial strategies for your unique situation, ensuring that when you're ready to make an offer on your dream property, you do so with the confidence and knowledge that you're making the best decision for your future.
Table of Contents
Your first home journey starts with confidence and ends with the keys in your hand
Every step is simple, clear, and tailored to your goals.
Important stuff:
Please note that the views and opinions expressed in this post are general information only, and this is not financial advice.
Any advice and information is provided by Buyvest Pty Ltd ABN 91 684 841 496, Australia Credit Licence No. 567392 and is general in nature, for educational purposes only and is not intended to constitute specialist or personal advice. This website has been prepared without considering your objectives, financial situation or needs. Therefore, consider the appropriateness of the advice for your situation and needs before taking any action. It should not be relied upon to enter into any legal or financial commitments. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy. If any financial product has been mentioned, you should obtain and read a copy of the relevant Product Disclosure Statement and consider the information contained within that Statement concerning your circumstances before deciding whether to acquire the product. You can obtain a copy of the PDS by emailing hello@buyvest.com.au. If you want to change your financial circumstances, such as applying for a loan, all loan applications are subject to credit approval.
All information on this website is subject to change without notice.
