Pathways to home ownership
Securing a pre-approval
First critical step: Securing a pre-approval is essential before serious property hunting. It provides a realistic expectation of your borrowing capacity, shows sellers you're a prepared buyer, and gives you a competitive advantage in the marketplace.
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. Understanding the pathways to home ownership will give you the edge over the competition. Our mortgage brokers guide you through the pre-approval process, helping you gather necessary documentation and navigate lender requirements efficiently. With pre-approval in hand, you'll be positioned to make competitive offers when you find the right property.
Understand your budget: Before securing pre-approval, explore our budgeting guide for first home buyers to ensure you understand what you can realistically afford.
Understanding the valuation process
Property assessment: Understanding the property valuation process is essential. Valuations determine how much a lender will provide, directly affecting your borrowing capacity and the total amount you can access for your purchase.
Understanding the property valuation process is essential in the home-buying journey. Valuations play an important 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. Different valuation types, from automated computer valuations to in-person assessments, provide varying levels of accuracy and detail about your prospective property.
First Home Owner Grant (FHOG)
Government support: The First Home Owner Grant (FHOG) can significantly supplement your deposit, reducing the amount you need to save and helping you enter the property market sooner.
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. NSW offers up to $10,000 to eligible first-time buyers, which can make a substantial difference to your deposit capacity and reduce your need for lenders mortgage insurance.
Stamp duty concessions
Cost reduction: Stamp duty concessions for first-time buyers can significantly lower or even eliminate these upfront costs, making homeownership more affordable from day one.
Stamp duty often represents a significant portion of upfront costs when buying a home. Various state governments offer stamp duty concessions to first-time buyers, which could lower or even eliminate these costs entirely. In NSW, first home buyers may qualify for stamp duty exemptions or reductions, depending on the property value and your circumstances. These concessions can save thousands of dollars, freeing up funds for your mortgage or home improvements.
Home Guarantee Scheme (HGS)
Government-backed support: The Home Guarantee Scheme lets you purchase with just a 5% deposit without paying LMI, with the government guaranteeing the remaining 20% and maintaining affordability.
The Home Guarantee Scheme (HGS) is a 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 (LMI). This scheme not only fast-tracks your homeownership dreams but also maintains affordability. The government guarantees the remaining amount needed to reach 20% deposit, allowing you to begin building equity in your property sooner. Check the benefits and risks of the Home Guarantee Scheme to ensure it's right for you.
Shared Equity Scheme
Co-ownership opportunity: The Shared Equity Scheme helps eligible buyers enter the property market with as little as 2% deposit, whilst government contributes up to 30 to 40% depending on property type.
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. This unique scheme reduces your initial borrowing requirement and monthly repayments, making homeownership more accessible and manageable. With the government as co-owner, your pathway to property ownership becomes significantly clearer.
Guarantor loans
Family support option: Guarantor loans allow a family member to guarantee part of your loan, helping you avoid LMI costs and enter the property market sooner with minimal deposit.
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). With your guarantor providing additional security through their property equity, lenders often view your application more favourably, potentially offering better loan terms and conditions.
Low deposit home loans
Flexible entry: Low deposit home loans with lenders mortgage insurance (LMI) enable you to purchase with 5 to 10% deposits, allowing you to begin your homeownership journey without waiting years to save 20%.
Low deposit home loans are an option if you're ready to purchase a home but haven't saved the typical 20% deposit. With lenders mortgage insurance (LMI), you can borrow with a smaller deposit. Whilst LMI adds an extra cost to your loan, it enables you to begin your homeownership journey without the wait. Our mortgage brokers can help you understand LMI costs versus the benefits of earlier property ownership.
Other deposit building strategies: Explore the First Home Super Saver Scheme to accelerate your deposit savings with tax benefits.
Using existing property equity
Leverage your assets: If you already own property, you can access accumulated equity to fund a deposit on your next home, significantly boosting your purchasing power without requiring additional savings.
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. Our home equity calculator helps you determine exactly how much you can access and use strategically.
Loan options for first home buyers
Product choices: The home loan market offers various products designed specifically for first home buyers. Understanding each option helps you select the loan structure that best matches your financial situation and goals.
The home loan market offers various products designed to meet the needs of first home buyers. Understanding each option helps you select a loan structure aligned with your circumstances:
- Fixed-rate loans: Provides payment stability with locked-in interest rates for a set period (typically 1 to 5 years), offering certainty for budgeting and protection against rate increases.
- Variable-rate loans: Offers flexibility with rates that change according to market conditions. These typically feature offset accounts and allow additional repayments without break costs.
- Split loans: Combines fixed and variable components to balance stability and flexibility, giving you the best of both worlds depending on your priorities.
- Offset accounts: Reduces interest payments by offsetting your loan balance with your savings, allowing you to pay less interest whilst maintaining access to emergency funds.
Loan to value ratio (LVR)
Borrowing efficiency: Your LVR expresses your loan amount as a percentage of the property value. Understanding LVR helps you determine deposit requirements and access better loan terms.
Your loan to value ratio (LVR) is the percentage of the property value that you're borrowing. For example, if you're borrowing $300,000 for a $400,000 property, your LVR is 75%. LVR affects several aspects of your home purchase:
- Lenders mortgage insurance (LMI): LVRs above 80% typically require LMI, adding costs to your loan.
- Interest rates: Lower LVRs often qualify for better interest rates from lenders.
- Borrowing capacity: Your LVR directly impacts how much lenders are willing to lend.
- Loan approval: Lower LVRs improve your chances of loan approval and better terms.
Budgeting for ongoing costs
Total cost planning: Beyond the purchase price and upfront costs, homeownership involves ongoing expenses. Budgeting for these ensures you can comfortably afford your property long-term.
Beyond the purchase price and upfront costs, homeownership involves ongoing expenses. Planning comprehensively includes:
- Mortgage repayments: Your primary ongoing cost, typically spread across 25 to 30 years.
- Council rates and water charges: Regular council charges vary by location and property value.
- Strata fees: For apartments and some townhouses, strata fees cover building maintenance and common areas.
- Home insurance: Essential protection for your property, typically annual or monthly.
- Maintenance and repairs: Budgeting 1 to 2% of property value annually helps cover unexpected repairs.
- Utilities and services: Electricity, gas, water, internet, and phone services add to your monthly budget.
Factoring these costs into your budget using our mortgage repayment calculator ensures you can comfortably afford your property in the long term.
Ready to explore your options?
Discover which pathway to homeownership best suits your circumstances. Our mortgage advisers help you compare options and develop a strategy tailored to your goals across Sydney and throughout NSW. Whether you need a mortgage broker in Ryde, Parramatta, or any other area, we're here to help you find the best home loans and guidance for your situation.
Book free consultation or call 0426 002 202
📧 Email: hello@buyvest.com.au
Frequently asked questions about home ownership pathways
Common questions answered: Below we address frequently asked questions about pathways to homeownership, helping you understand timelines, deposit requirements, and strategic options available to you.
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 experts at Buyvest can provide valuable insights into your readiness for homeownership and help identify areas to improve before applying for a loan pre-approval.
How much deposit do I need to buy my first home?
Whilst 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 5% deposit. The Shared Equity Scheme helps eligible buyers with 2% deposit. Using a guarantor loan, you might enter the market with minimal or no deposit. Low deposit loans with LMI allow 5 to 10% deposits. The ideal deposit size depends on your financial situation, property goals, and scheme eligibility.
How long does the entire home buying process typically take?
The timeline varies significantly based on individual circumstances, but a typical first home purchase follows this approximate timeline: pre-approval process takes 3 days to 1 week, property search typically takes 1 to 3 months, contract negotiation and exchange takes 1 to 2 weeks, settlement period runs 30 to 90 days (typically 42 days). From serious property hunting to receiving your keys, the process often takes around 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, and 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. Buyvest can help you identify which combinations are available to you and maximise your benefits.
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 ($1,200 to $2,500), building and pest inspections ($300 to $800), mortgage registration and transfer fees, loan application or establishment fees, moving costs, initial repairs or renovations, and furniture and appliances. These costs typically add 2 to 5% to your property purchase price, though first home buyer concessions can significantly reduce this amount.
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, have family members willing and financially able to provide a guarantee, want to avoid lenders mortgage insurance (LMI), are looking to enter the market sooner rather than waiting to save, and understand the responsibilities and risks for both you and your guarantor. Both you and your potential guarantor should seek independent financial and legal advice before proceeding with this arrangement.
Why should I choose Buyvest for my home ownership journey?
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. Our team across all major areas, from Ryde to Parramatta, Baulkham Hills to Penrith, and beyond, combines local expertise with national lending access. We help you explore all available pathways, compare home loans, find the best mortgage rates, and develop a strategy tailored to your unique circumstances, ensuring you're equipped to make the best decision for your future.
Take the next step
Ready to begin your journey to homeownership? Connect with Buyvest today and discover which pathway is right for you. Together, we'll turn your property dreams into reality with expert mortgage broker guidance and support every step of the way.
Book free consultation or call 0426 002 202
📧 Email: hello@buyvest.com.au
Buyvest mortgage brokers serving Sydney and NSW
We specialise in helping first home buyers and homeowners navigate multiple pathways to homeownership, compare home loans, find the best mortgage rates, and access government schemes across Parramatta, North Sydney (Chatswood, Mosman), Hills District (Baulkham Hills, Castle Hill, Kellyville), and Inner West (Marrickville, Newtown, Leichhardt).
📱 Phone: 0426 002 202
📧 Email: hello@buyvest.com.au
📅 Book: Schedule your free consultation
About our mortgage broking services:
Buyvest is a specialist mortgage broker dedicated to helping Australians compare home loans, find low rate home loans, and secure the best mortgage rates available. Whether you're exploring multiple pathways to homeownership, need expert guidance on loan to value ratio, want to understand your deposit options, or need a trusted mortgage broker Sydney or nationwide, our team of experienced advisors are here to help you achieve your homeownership goals. We specialise in first home buyer home loans, investment property finance, and refinancing options across NSW and Australia.
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.
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