First Home Buyers 101: Your Step-by-Step Guide to Homeownership

Welcome back to another episode of Talk Property To Me! I'm your host, Brad East, alongside my co-host, Aaron Downie. In this episode, we dive deep into the essential steps for first home buyers, providing a comprehensive guide to navigate the often overwhelming process of purchasing your first property.

We kick off the discussion by addressing the most significant hurdle for first-time buyers: saving for a deposit. We explore the common misconceptions surrounding deposit amounts, particularly the traditional 20% benchmark, and introduce the concept of Lenders Mortgage Insurance (LMI). We explain how LMI protects the bank rather than the borrower and discuss the implications of needing to save a substantial deposit versus a smaller one.

Next, we highlight the government initiatives available to assist first home buyers, such as the First Home Loan Deposit Scheme, which allows buyers to purchase with as little as a 5% deposit without incurring LMI. We clarify the eligibility criteria for this scheme and compare it to the shared equity scheme proposed by the Labor government. Additionally, we touch on the First Home Super Saver Scheme, although we note that it’s not as commonly utilised.

As we move forward, we emphasise the importance of understanding all costs associated with buying a home, including stamp duty, legal fees, and inspection costs. We break down the specifics of stamp duty exemptions for first home buyers in New South Wales and discuss how these costs can significantly impact the total amount needed to enter the market.

We also provide practical tips for saving more effectively, such as setting up separate bank accounts to manage living expenses and savings. We share personal anecdotes about investment apps that can help buyers accumulate savings over time.

Transitioning into the finance side of things, we discuss the importance of obtaining pre-approval for a loan and the difference between pre-approval and formal approval. We stress the need for potential buyers to consult with a mortgage broker to understand their borrowing capacity and to prepare for the application process.

In the latter part of the episode, we shift our focus to the property search itself. We discuss how to conduct market research, the significance of understanding your budget, and the factors to consider when choosing a location. We provide insights into the psychology of pricing in real estate and how to interpret guide prices versus sold prices.

Finally, we walk listeners through the process of making an offer, the importance of understanding contracts, and the nuances of auction versus private treaty sales. We emphasise the need for buyers to be well-prepared and informed to make strong offers and navigate the settlement process smoothly.

Throughout the episode, we aim to empower first home buyers with the knowledge and tools they need to make informed decisions in their property journey. Whether you're just starting to save or are ready to make an offer, this episode is packed with valuable insights to help you succeed in the competitive real estate market.

Join us as we break down the complexities of buying your first home and provide you with the confidence to take the next steps in your property journey!

• 00:00:00 - Introduction to First Home Buyers 101
• 00:01:06 - The Challenge of Saving a Deposit
• 00:01:17 - Understanding Lenders Mortgage Insurance (LMI)
• 00:02:10 - Government Schemes: First Home Loan Deposit Scheme
• 00:04:14 - Eligibility for Government Schemes
• 00:05:37 - First Home Super Saver Scheme
• 00:06:33 - Additional Costs Beyond the Deposit
• 00:07:04 - Stamp Duty Exemptions for First Home Buyers
• 00:08:00 - Legal Fees and Other Costs
• 00:09:03 - Inspection Costs and Their Importance
• 00:09:36 - First Home Owners Grant Overview
• 00:10:51 - Strategies for Saving More
• 00:11:26 - Investment Apps and Budgeting Tips
• 00:12:57 - Guarantor Loans Explained
• 00:13:54 - The Importance of Pre-Approval
• 00:15:39 - Understanding Borrowing Capacity
• 00:19:25 - Credit Scores and Their Impact
• 00:21:00 - Managing Credit Inquiries
• 00:23:12 - Types of Home Loans: Fixed vs. Variable
• 00:25:32 - Offset Accounts vs. Redraw Facilities
• 00:27:51 - Finalising the Finance Side
• 00:28:11 - Researching the Property Market
• 00:30:07 - Understanding Market Dynamics
• 00:31:04 - Analysing Days on Market
• 00:32:02 - Making Strong Offers
• 00:34:35 - Navigating the Offer Process
• 00:36:06 - Understanding Contracts and Cooling Off Periods
• 00:38:01 - Auction vs. Private Treaty Purchases
• 00:39:54 - Vendor Considerations in Offers
• 00:40:21 - Final Steps After Offer Acceptance
• 00:42:57 - Settlement Day Expectations
• 00:45:02 - Conclusion and Advice for First Home Buyers

ABOUT THE HOSTS

BRAD EAST

Brad East is the Managing Director of Wisebuy Home Loans. Brad is an award-winning mortgage broker and has helped thousands of clients gain finance to purchase properties. Wisebuy Home Loans is the go-to mortgage brokerage for clients wanting out-of-the-box applications approved.

Website → https://wisebuygroup.com.au 

LinkedIn → https://www.linkedin.com/in/newcastlemortgagebroker/ 

Instagram → https://www.instagram.com/bradeast_mortgagebroker/ 

Facebook → https://www.facebook.com/bradeastofficial

AARON DOWNIE

Joining the podcast in 2024, Aaron Downie is a seasoned property investor and director of Mackenzie Buyers Agency. Aaron’s deep understanding of the property market and investment strategies provides listeners with invaluable insights.

Website: https://www.mackenziepropertygroup.com.au/

Linkedin: https://www.linkedin.com/in/aaron-downie-1b2749134/