Buying your first home: a calm order of operations

Buying a first home involves a lot of decisions arriving at once: where to live, how much to spend, which loan, which lender and when to make an offer. It is easier when you take them in a sensible order. This guide sets out one way to do that. It is general information, not advice about your circumstances.

Start with your own numbers, not the listings

Before you look at properties, get a clear picture of what you earn, what you spend and what you already owe. Lenders will ask about all three. Credit cards count even when the balance is zero, because the limit is what they look at. Buy now pay later accounts, car loans and HECS-HELP debts can also affect how much a lender is willing to offer.

Write down a monthly repayment you would be comfortable making, with room left over for rate changes, repairs and life in general. That number is more useful to you than the maximum a lender might approve.

Understand the deposit and the costs around it

Your deposit is only part of the money you need. Upfront costs commonly include stamp duty (transfer duty), conveyancing or legal fees, building and pest inspections, loan application fees and moving costs. Each state and territory sets its own duty rules and first home buyer concessions, and these change, so check the current rules with your state revenue office rather than relying on a figure you read some time ago.

If your deposit is less than 20% of the purchase price, many lenders will require lenders mortgage insurance (LMI). LMI protects the lender, not you, and can add significantly to your costs. Government schemes may reduce or remove the need for LMI for eligible buyers. Eligibility and places can change, so confirm the current details on the official scheme website.

Pre-approval: helpful, but not a promise

Conditional pre-approval is an indication from a lender that it may lend you a certain amount, subject to conditions. It can help you bid with more confidence. It is not a guarantee. Formal approval usually depends on a valuation of the specific property and a final check of your situation, and pre-approvals generally expire after a set period.

Applying with several lenders at once can leave several credit enquiries on your file. It is worth narrowing your options first.

Choose features you will actually use

• Variable, fixed or split: variable rates can move up or down; fixed rates give certainty for a period but often limit extra repayments and can carry break costs.
• Offset or redraw: both can reduce interest if you keep spare money in the loan, but they work differently. See our offset and redraw guide.
• Fees: an annual package fee only makes sense if the features or discount it brings are worth more than the fee.
• Repayment type: principal and interest repayments reduce the balance; interest-only periods keep repayments lower for a time but the balance does not reduce.

From offer to settlement

Once an offer is accepted, the contract sets the timeline. Your conveyancer or solicitor reviews the contract, the lender values the property and issues formal approval, and settlement happens on the agreed date. Read loan documents before you sign them and ask about anything you do not understand. A good broker should explain why a recommended loan suits your needs and objectives.

How Onlend fits

Onlend is planned to help you organise this process: gather the right information once, see a clear process summary and know what happens next. Personalised recommendations will be reviewed by a broker before they reach you, and nothing is submitted to a lender without your say-so.