Your Essential First Home Buyer Checklist for Oakleigh
Buying your first home in Oakleigh is an exciting milestone, but it can feel overwhelming without proper preparation. This first home buyer checklist will guide you through each crucial step of your home buying journey, ensuring you're well-prepared to make informed decisions.
Understanding Your First Home Buyer Budget
Before you start browsing properties, establishing your first home buyer budget is essential. Your budget determines what you can realistically afford and helps narrow your property search.
Consider these key factors:
- Your current savings for a deposit
- Monthly income and expenses
- Ongoing costs like council rates, utilities, and maintenance
- Potential changes to your financial situation
Most lenders assess your borrowing capacity based on your income, expenses, existing debts, and financial commitments. Understanding these parameters early helps you set realistic expectations and avoid disappointment later in the process.
First Home Buyer Eligibility Requirements
To access various government schemes and concessions, you'll need to meet specific first home buyer eligibility criteria. Generally, you must be:
- An Australian citizen or permanent resident
- At least 18 years old
- Purchasing a property you intend to live in as your principal place of residence
- Never previously owned property in Australia
Different schemes have varying requirements, so it's worth reviewing each option carefully with a professional mortgage broker in Oakleigh.
Exploring First Home Buyer Grants and Concessions
First home buyers in Victoria can access several valuable benefits:
First Home Owner Grants (FHOG)
The Victorian government offers first home owner grants for eligible buyers purchasing or building a new home. The grant amount varies based on property type and location.
First Home Buyer Stamp Duty Concessions
First home buyer stamp duty concessions can save you thousands of dollars. In Victoria, eligible purchasers may receive full or partial exemptions on stamp duty, depending on the property value.
First Home Loan Deposit Scheme
This government initiative helps eligible first home buyers purchase a property with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI). The scheme has limited places each year, so early application is recommended.
Regional First Home Buyer Guarantee
For those considering properties in regional areas, the Regional First Home Buyer Guarantee offers similar benefits to the First Home Loan Deposit Scheme, potentially with more availability.
Low Deposit Options for First Home Buyers
Saving a 20% deposit can take years, but several low deposit options exist:
- 5% deposit: Available through government guarantee schemes or with LMI
- 10% deposit: More lenders offer home loan options at this level
- Gift deposit: Some lenders accept genuine savings combined with gifted funds from family members
While a larger deposit typically secures better interest rate discounts, low deposit options make homeownership more accessible sooner.
Understanding Home Loan Options
When you apply for a home loan, you'll encounter various product features:
Interest Rate Types
- Variable interest rate: Fluctuates with market conditions, offering flexibility with features like offset accounts and redraw facilities
- Fixed interest rate: Locks in your rate for a set period (typically 1-5 years), providing payment certainty
- Split loans combine both options for balanced benefits
Additional Features
- Offset account: A transaction account linked to your loan that reduces interest charged
- Redraw: Access to additional repayments you've made above the minimum
Each feature impacts your loan differently, so understanding your priorities helps when comparing home loans.
The First Home Loan Application Process
Your first home loan application journey involves several stages:
- Pre-approval: Obtain conditional approval before house hunting to understand your borrowing capacity
- Property search: Find a home within your approved budget
- Formal application: Submit a complete home loan application with all required documentation
- Valuation: The lender assesses the property value
- Final approval: Receive unconditional loan approval
- Settlement: Complete the purchase and receive your keys
Pre-approval gives you confidence when making offers and demonstrates to vendors that you're a serious buyer.
First Home Super Saver Scheme
The First Home Super Saver Scheme allows you to save money for your deposit inside your superannuation fund. You can contribute up to $15,000 per year (maximum $50,000 total) and potentially benefit from concessional tax treatment. When you're ready to purchase, you can withdraw these contributions plus deemed earnings.
Understanding Lenders Mortgage Insurance (LMI)
When your deposit is less than 20% of the property value, lenders typically require Lenders Mortgage Insurance (LMI). This one-time premium protects the lender if you default on your loan. The cost varies based on your deposit size and loan amount, ranging from several thousand to tens of thousands of dollars.
While LMI adds to your upfront costs, it enables you to enter the property market sooner rather than waiting years to save a larger deposit.
Essential Documents for Your Application
When you apply for a home loan, gather these documents:
- Proof of identity (driver's licence, passport)
- Proof of income (payslips, tax returns, employment contracts)
- Bank statements (typically 3-6 months)
- Existing loan statements
- Savings history demonstrating genuine savings
- Details of assets and liabilities
Having these ready accelerates your first home loan application and demonstrates your preparedness to lenders.
Working with a Mortgage Broker
A mortgage broker can significantly streamline your home buying experience. They compare home loan options across multiple lenders, identify suitable products for your circumstances, and manage the application process on your behalf.
For first home buyers, professional guidance helps you understand complex concepts, access appropriate grants and schemes, and potentially secure better interest rates than approaching lenders directly.
Your Next Steps
Buying your first home in Oakleigh requires careful planning, but with this checklist, you're well-equipped to begin your journey. From understanding your budget and eligibility through to selecting the right home loan options and completing your application, each step brings you closer to homeownership.
Remember that every first home buyer's situation is unique. What works for one person may not suit another, so personalised advice tailored to your circumstances is invaluable.
Ready to start your first home buying journey? Call one of our team or book an appointment at a time that works for you. At Blue Lion Lending, we specialise in helping Oakleigh residents achieve their homeownership goals with professional, tailored mortgage advice.