What to Know When Searching for Your First Property

Starting Your Property Search Journey

Buying your first home is one of the biggest financial decisions you'll make, and knowing where to start your property search can feel overwhelming. The good news is that with the right approach and a solid understanding of what you can afford, you can find a property that ticks your boxes without stretching yourself too thin.

Before you start scrolling through listings or attending open homes, it's worth understanding your borrowing capacity and what you can realistically afford. This is where speaking with a mortgage broker comes in handy - we can help you work out your first home buyer budget and show you what your home loan options look like.

Understanding Your Budget Before You Search

One of the most common mistakes first home buyers make is falling in love with properties before knowing what they can actually borrow. Your first home buyer budget isn't just about the deposit - it includes stamp duty, legal fees, building inspections, and ongoing costs like rates and maintenance.

Here's what to consider when working out your budget:

• Your deposit amount (whether it's a 5% deposit, 10% deposit, or more)
• Potential Lenders Mortgage Insurance (LMI) if you're borrowing more than 80% of the property value
• First home buyer stamp duty concessions available in your state
• Ongoing repayments based on different interest rate scenarios
• Additional costs like conveyancing, inspections, and moving expenses

Many first home buyers don't realise there are low deposit options available through schemes like the First Home Loan Deposit Scheme and the Regional First Home Buyer Guarantee. These can help you enter the market sooner, sometimes with as little as a 5% deposit without paying LMI.

Getting Pre-Approval Before Property Hunting

Before you get serious about your property search, getting pre-approval for your first home loan is one of the smartest moves you can make. Pre-approval gives you a clear idea of how much you can borrow and shows sellers that you're a serious buyer.

When you apply for a home loan pre-approval, lenders assess your financial situation including your income, expenses, credit history, and deposit. This process typically takes a few days and gives you confidence when making offers.

Pre-approval also helps you:

• Set realistic property search parameters
• Move quickly when you find the right property
• Negotiate with confidence at auctions or private sales
• Avoid wasting time on properties outside your price range

Choosing the Right Location

Location is everything in property, and for first home buyers, it often means making some compromises. You might need to look a bit further from the CBD or consider suburbs that are still developing but show strong potential.

For buyers in Carnegie and surrounding Melbourne suburbs, you'll want to consider:

• Proximity to public transport and major roads
• Local amenities like shops, schools, and parks
• Future development plans for the area
• Comparable sales data to ensure you're not overpaying
• Rental demand if you might need to rent it out later

Remember that your first home doesn't have to be your forever home. Many buyers start with something modest and use the equity they build to upgrade down the track.

Different Property Types for Different Budgets

Your first home buyer budget will largely determine what type of property you can consider. Units and apartments are often more affordable entry points, especially in inner suburbs, while houses typically require a larger deposit and come with higher purchase prices.

Consider these options:

1. Units and Apartments: Lower entry cost, less maintenance, often closer to the city
2. Townhouses: A middle ground between units and houses
3. Houses in Outer Suburbs: More space but potentially longer commutes
4. Properties Needing Renovation: Can offer value but require additional funds and time

Making the Most of First Home Buyer Grants and Schemes

Australian first home buyers have access to various government schemes and concessions that can make buying more affordable. Understanding first home buyer eligibility criteria for these programs is crucial.

Key schemes and concessions include:

• First home owner grants (FHOG) which vary by state
• First home buyer stamp duty concessions that can save thousands
• The First Home Loan Deposit Scheme which helps you avoid LMI
• Regional First Home Buyer Guarantee for properties in regional areas
• First Home Super Saver Scheme which lets you save through your super fund

You might also consider a gift deposit from family members, which many lenders accept as part of your deposit, subject to certain conditions.

Choosing Between Fixed and Variable Interest Rates

When you apply for a home loan, you'll need to decide on your interest rate structure. This decision can significantly impact your repayments and how you manage your first home loan.

A fixed interest rate locks in your rate for a set period (typically 1-5 years), giving you certainty about your repayments. A variable interest rate can go up or down based on market conditions but often comes with features like an offset account or redraw facility that can help you pay off your loan faster.

Many first home buyers choose a split loan - part fixed, part variable - to get the benefits of both. Some lenders also offer interest rate discounts for first home buyers or those with larger deposits.

Your First Home Buyer Checklist

Before you start seriously looking at properties, make sure you've ticked these boxes:

• Checked your credit score and addressed any issues
• Saved your deposit and factored in all associated costs
• Researched first home buyer grants and concessions you're eligible for
• Spoken with a mortgage broker about your home loan options
• Obtained pre-approval for your first home loan application
• Established your must-haves versus nice-to-haves in a property
• Set up property alerts on listing websites
• Arranged building and pest inspection contacts

What Happens After You Find Your Property

Once you've found a property and made an offer, things move quickly. You'll need to finalise your first home loan application, arrange building and pest inspections, and work with a conveyancer or solicitor to handle the legal side of the purchase.

Your mortgage broker will work with you through this process, ensuring your home loan application progresses smoothly and you understand all the terms and conditions of your loan, including any fees, the interest rate, and features like offset account access or redraw facilities.

Finding and buying your first home takes time, research, and patience. But with the right preparation and professional guidance, you can make informed decisions that set you up for success.

If you're ready to start your property search and want to understand your borrowing capacity and home loan options, the team at Plavin Finance is here to help. Whether you're looking in Carnegie or anywhere across Australia, we can guide you through the first home loan application process and help you access schemes like the First Home Loan Deposit Scheme.

Call one of our team or book an appointment at a time that works for you to discuss your first home buyer journey.