The journey from mortgage pre-approval to owning your first home can feel overwhelming. For first time home buyers across Sydney and NSW, understanding each step of this process is crucial to achieving your homeownership goals with confidence.

This comprehensive guide walks you through the entire first home buyers journey – from getting pre-approved for a home loan to collecting your keys on settlement day. Whether you're in Eastern Suburbs, Canterbury-Bankstown, or anywhere across Greater Sydney, this roadmap will help you navigate the path to homeownership.

Understanding the first home buyer journey

The first home buyer journey typically follows a clear progression, though timelines can vary. Here's what to expect:

Phase 1: Preparation (1-6 months)

Assessment of finances, understanding borrowing capacity, saving for deposit, researching the market

Phase 2: Pre-Approval (1-2 weeks)

Formal loan pre-approval, defining your budget, understanding what you can afford

Phase 3: Property Search (1-6 months)

Attending inspections, researching suburbs, making offers, negotiating terms

Phase 4: Contract & Finance (2-4 weeks)

Exchanging contracts, completing building inspections, finalizing loan approval

Phase 5: Settlement (30-90 days)

Final property inspection, settlement preparation, collecting keys

Let's explore each phase in detail so you know exactly what to expect as a first time home buyer.

Phase 1: Financial preparation and research

Assessing your financial position

Before you can start buying your first home, you need a clear picture of your financial situation. This includes:

Income verification – gather recent payslips, tax returns, and employment details
Credit history check – review your credit score and address any issues
Existing debts – list all loans, credit cards, and financial commitments
Living expenses – document your monthly spending patterns
Savings assessment – calculate available funds for deposit and costs

Our detailed budgeting guide for first home buyers helps you organize your finances and understand exactly where you stand.

Understanding how much you can borrow

Your borrowing capacity depends on multiple factors:

Income – gross annual income (including bonuses, overtime, rental income)
Expenses – your monthly living costs and existing debt repayments
Deposit size – larger deposits can increase borrowing power
Number of dependents – children or others you financially support
Employment type – permanent, contract, casual, or self-employed

Understanding your Loan to Value Ratio (LVR) is critical at this stage, as it impacts both your borrowing amount and whether you'll need to pay Lenders Mortgage Insurance.

Building your deposit

For first home buyers, deposit requirements have become more flexible with government assistance programmes. Your options include:

5% deposit – through the Home Guarantee Scheme
2% deposit – via the Shared Equity Scheme (NSW)
10-15% deposit – traditional approach with family support or savings
20%+ deposit – avoids LMI and secures better interest rates

Explore all your deposit options including the First Home Super Saver Scheme to accelerate your savings.

Expert Tip: Don't forget about genuine savings requirements. Most lenders want to see that you've saved at least 5% of your deposit over 3+ months, demonstrating financial discipline.

Phase 2: Securing your pre-approval

Securing a pre-approval is arguably the most important step in your first home buyer journey. It transforms you from a casual browser into a serious buyer.

What is pre-approval?

Pre-approval (also called conditional approval) is when a lender reviews your financial situation and agrees in principle to lend you a specific amount. It's valid for 3-6 months and gives you:

Budget certainty – know exactly what price range to search within
Negotiating power – sellers and agents take you seriously
Competitive advantage – especially at auctions or in hot markets
Time to property search – no rushing to arrange finance after finding a home
Confidence – bid or make offers knowing your finance is ready

Documents needed for pre-approval

For Employed Borrowers:

Last 2-3 payslips
Most recent tax return and notice of assessment
Employment contract or letter
3-6 months bank statements
ID (driver's licence and passport)
Details of assets and liabilities

For Self-Employed Borrowers:

Last 2 years tax returns and notices of assessment
Financial statements (Profit & Loss, Balance Sheet)
ABN and business registration details
6 months business bank statements
Accountant's letter (if available)

Working with a mortgage broker vs. direct to bank

As a first time home buyer, you have two main options for securing pre-approval:

Going Direct to a Bank:

Limited to one lender's products
May miss better rates or features elsewhere
You handle all paperwork and follow-up
Limited guidance on government schemes

Using a Mortgage Broker:

Access to 35+ lenders and hundreds of loan products
Expert guidance on which lender suits your situation
Assistance with paperwork and application
Knowledge of government schemes and how to maximise benefits
Often no cost to you (paid by lenders)

Get pre-approved today

Our expert mortgage advisers help first home buyers across Sydney, Northern Beaches, St George, and throughout NSW secure the best pre-approval for their situation.

Start your pre-approval Call: 0426 002 202

Phase 3: The property search journey

With pre-approval secured, you can now confidently search for your first home. This is often the most exciting – and challenging – phase of the journey.

Defining your property criteria

Before you start attending inspections, establish clear criteria for buying the right property:

Property type – freestanding house, strata apartment/townhouse, or vacant land?
Location priorities – proximity to work, schools, family, transport
Must-haves vs. nice-to-haves – be realistic about compromises
Future growth potential – consider capital growth prospects
Lifestyle fit – does the area match your lifestyle needs?

Our guide on why location, condition and vibes matter helps you evaluate properties beyond just price and features.

Understanding different purchase methods

In NSW, first home buyers can purchase property through several methods:

Private Treaty

Most common and first-buyer-friendly method
Negotiate directly with vendor through agent
Include conditions (finance, building inspection)
Cooling-off period available (usually 5 business days in NSW)

Auction

Competitive bidding environment
Requires unconditional finance before bidding
No cooling-off period
Need to complete all due diligence beforehand

Off-the-Plan

Purchase before construction completes
Extended settlement period (12-24+ months)
May qualify for additional grants (new property)
Risks include value changes and construction delays

Conducting due diligence

Before making an offer, thorough due diligence is essential:

Building and pest inspection – critical for identifying structural issues ($400-800)
Strata report – for apartments/townhouses, review financials and by-laws
Contract review – have a conveyancer or solicitor review the contract
Council checks – zoning, development applications, future plans
Bank valuation – understand how banks assess the property

Phase 4: Making an offer and exchanging contracts

Negotiating your purchase

When you've found the right property, it's time to make an offer. For first time home buyers, this can be nerve-wracking, but preparation helps:

Research comparable sales – know what similar properties sold for recently
Understand the vendor's position – are they motivated to sell quickly?
Start with a reasonable offer – low-balling can offend and end negotiations
Include appropriate conditions – finance approval, building inspection
Get everything in writing – all terms should be clearly documented

Exchange of contracts

Once your offer is accepted, you'll move to exchange of contracts:

Step 1: Contract Preparation

Vendor's solicitor prepares the contract. You have 5 business days cooling-off period (private treaty only)

Step 2: Deposit Payment

Pay the deposit (typically 10% of purchase price) into the agent's trust account

Step 3: Conditions Satisfaction

Complete building inspection and finalise your loan approval within the specified timeframe

Step 4: Contract Becomes Unconditional

Once all conditions are met, the contract becomes binding and you're committed to purchase

Finalizing your home loan approval

Your pre-approval now needs to become full (unconditional) approval. Your lender will:

Order a property valuation to confirm the property's worth
Review the contract of sale
Verify your employment and financial details haven't changed
Conduct final credit checks
Issue formal loan approval

Understanding property purchase processes and valuation helps you navigate this stage smoothly.

Important: Keep your financial situation stable during this period. Don't change jobs, take on new debts, or make major purchases until after settlement. These changes can jeopardise your loan approval.

Phase 5: Settlement and taking ownership

Preparing for settlement

The period between exchange and settlement is typically 30-90 days. During this time:

Arrange insurance – you'll need building and contents insurance before settlement
Book final inspection – usually conducted 1-2 days before settlement
Organise utilities – arrange connections for electricity, gas, water, internet
Plan your move – book removalists or organise transport
Coordinate with professionals – stay in touch with solicitor and mortgage broker

Final property inspection

The final inspection is your last chance to ensure the property is in the agreed condition:

Check all fixtures and fittings included in the sale are present
Ensure any agreed repairs have been completed
Verify all appliances are working
Document any issues immediately

Settlement day

Settlement is when ownership legally transfers from seller to buyer. Your solicitor and the bank handle most of this, but here's what happens:

Morning of settlement – final checks and document preparation
Funds transfer – bank releases loan funds to vendor's solicitor
Title transfer – property ownership officially transfers to you
Keys released – real estate agent provides keys once settlement confirms
Celebration! – you're now a homeowner

Maximising NSW first home buyer benefits throughout your journey

Throughout this entire process, first home buyers in NSW can access significant government support:

Stamp duty savings

NSW offers generous stamp duty concessions:

Full exemption – properties up to $800,000
Concessional rates – properties $800,000–$1,000,000
Save up to $30,000+ on stamp duty

First Home Owner Grant

The NSW First Home Owner Grant provides $10,000 for new home purchases under $600,000 (or $750,000 for land and construction).

Deposit assistance schemes

Reduce your deposit requirement through:

Home Guarantee Scheme – buy with 5% deposit, no LMI
Shared Equity – NSW government co-purchases with just 2% deposit

Read about both the benefits and risks of these schemes to make informed decisions.

Ready to start your journey?

We guide first home buyers through every stage – from pre-approval to settlement – across Sutherland Shire, Central Coast, Western Sydney, and all of NSW.

Let's map out your personalised pathway to homeownership.

Book free consultation Call: 0426 002 202

Common challenges and how to overcome them

Challenge 1: Saving your deposit

Solution: Use the First Home Super Saver Scheme to boost savings with tax benefits, or explore the Home Guarantee Scheme to enter the market with just 5% down.

Challenge 2: Competition in hot markets

Solution: Have solid pre-approval, know your maximum price, and be ready to act quickly. Consider less competitive suburbs or buying off the plan.

Challenge 3: Understanding complex processes

Solution: Work with experienced professionals – mortgage broker, solicitor, buyer's agent – who can guide you through each step and explain everything clearly.

Challenge 4: Property doesn't meet bank valuation

Solution: Understand how banks value properties before making offers. If valuation comes in low, you can negotiate with the vendor or increase your deposit.

Challenge 5: Last-minute financial changes

Solution: Maintain financial stability throughout the process. Avoid job changes, new loans, or large purchases until after settlement is complete.

Your complete first home buyer toolkit

To support you throughout your journey, explore these comprehensive resources:

Pathways to home ownership – complete overview
Finding the right financing option – loan comparison guide
Comprehensive budgeting guide – financial planning tools
Building your first home – construction loan guide

Next steps: Begin your journey today

The journey from pre-approval to home ownership is achievable with the right guidance and preparation. Whether you're just starting to save or ready to get pre-approved, taking the first step is what matters most.

As a first home buyer in Sydney or NSW, you have access to unprecedented support through government schemes, competitive lending, and expert guidance. The key is understanding each phase and having professionals in your corner.

Ready to begin?

Family enjoying the journey to homeownership together — **Your dream home is closer than you think.**

**Start your journey with Buyvest today!**

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.

Pre-approval to home ownership