5 Steps for First Home Buyers - Wealthy Self

If you’ve been thinking about buying your first home then, congrats! It’s an exciting thing and probably the biggest purchase you’ll ever make (no pressure!).  You may feel a bit of “analysis paralysis” which can be overwhelming. 

To keep things simple, I’ve put together 5 simple steps to help get you buy-ready and empowered to jump onto the property ladder.

Step 1 – Set your Goals

This includes the classic who, what, when, where, why and how methodology. Answer the questions below, keeping them  simple, short and specific:

Who is making the purchase?  single, couple, in a trust? 

What kind of property do you want to buy and where are you looking?

When is your ideal time-frame to buy a home?

Why do you want to buy a home?

How much is the home and what is your budget?


Step 2 – Work out your deposit and costs

Now you’ve identified your property goals, it’s time to work out your deposit!

In order to avoid lenders mortgage insurance (LMI), which goes straight to the bank, typically you will need to cough up around 20% of the property value for your deposit. 

So a $600,000 home means you should have a $120,000 deposit. Many lenders will let you borrow more than 80% of the property’s value, meaning you can have less than 20% as a deposit – BUT this will likely mean paying a hefty premium for LMI.

Other additional costs to consider include: 

  • stamp duty
  • conveyancing 
  • bank fees

Remember that stamp duty is different in each state and will depend on your purchase price and if you are a genuine first home buyer. For example in Queensland, stamp duty on a $550k property is $10,600 versus $0 for a $500k property – a huge difference!

Check out this cool stamp duty calculator to get an idea of what costs you’re up for on top of your deposit. It will also help ascertain if you qualify for any incentives or initiatives.


Step 3 – Work out your cash flow

Now have your deposit amount and have worked out the other costs, you can determine if you have enough cash saved right now, or if you still need to save more to achieve your goal.

This is where tracking your cash flow (income and expenditure)  will help make your dream a reality, instead of realizing too late, that you’ve spent it all on takeaway coffee and avocado on toast like most of us Millennials – haha!

What we’re saying is,  it’s time to make a budget! 

Write down your net income (your take-home pay) then minus all your expenses to see what’s left each fortnight/month. Doing this manually can be a pain and quite frankly, it’s not much fun, which is why our Wealthy Self clients use an easy, budgeting app with real-time software so you can see your position at any time. If this sounds like your jam, book in a chat today to see how Wealthy Self can help you to set your goals and create a budget you can actually stick to!

Once you know your cash flow, you will be in a better position to now see what loan you can afford!


Step 4 – Get a Mortgage Broker

Going to a bank for a mortgage is like going to a restaurant that serves only one dish (and they might not do it that well). You’d have to really want it right?

So if the one option fits all approach doesn’t actually work for you (hint: it probably won’t!), then you do have the option of getting advice from a mortgage broker.

Never used one before? No worries! Mortgage brokers have access to a variety of different lenders (normally 30 or so) ranging from the big 4 right down to smaller, niche lenders that can cater for more specific situations, like being self-employed. 

The broker will help tailor a mortgage to your situation and will compare lenders to get you a competitive deal. If you’re considering buying a home, you may want to get a pre-assessment from a mortgage broker, which will provide you a better idea of how much you can borrow (and repay) to get you inspection ready!

Contact Wealthy Self to speak with one of our approved Mortgage Brokers.


Step 5 – Assemble your Team and Take Action

Now you’re lining up your ducks, it’s time to make sure you’ve got the right people in your team to support you through this journey!

Financial Adviser 

As a Financial Adviser, together, we will go through your financial  position in detail, so you and can work closely with your mortgage broker to determine what you should borrow, not what can borrow (these are different things!) 

Mortgage Broker

Scrolled right down to the end? Take a look at Step 4 to see what a mortgage broker can do for you! I also can refer you to a Mortgage Broker upon request to help your loan application.

Real Estate Agent / Buyers Agent 

Contact your local agent and take a look online to enquire about upcoming listings, inspections and potential off-market activity, using your affordability criteria as above to get you started on the ladder!

Buying your first home is an exciting thing! It can be overwhelming as there’s a lot involved, so please get in touch if you want to start planning your home purchase today.


General Advice Disclaimer

This blog contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making any strategy or product decision. InterPrac Financial Planning Pty Ltd and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this document except for liability under statute which cannot be excluded.