Ready to Buy Your First Home? Here’s How to Get Started with a First Home Buyer Loan

By Deltos Finance on November 17, 2023
first home buyer loan

While the dream of owning a home is universal, facing the financial intricacies of a first home buyer loan can seem intimidating. That’s where we step in. Our mission? It is to simplify the process and guide you to ensure a seamless experience.

For starters, here are some tried-and-true tips for applying for a first home buyer loan:

1. Understand the Basics of a First Home Buyer Loan

If you’re stepping into the property market for the first time, a first home buyer loan is a financial solution that allows homebuyers to borrow the funds needed to acquire property. Essentially, it’s a mortgage for those buying a home for the first time. 

Depending on the lender, there are different requirements for the deposit amount. Some lenders require a 10% deposit whereas others are happy with 5%. Keep in mind that having a deposit amount that’s less than 20% of the property value will require you to pay an additional sum for lenders mortgage insurance. 

2. Craft a Realistic Budget

Before dreaming about four-poster beds or marble countertops, get a clear picture of your finances and budget. Remember, it’s not just about the monthly loan repayments; factor in maintenance costs, property taxes and insurance premiums.

Use online calculators dedicated to first-time buyers. They factor in diverse financial elements, ensuring a realistic view of what you can afford.

3. Navigate Your Mortgage Options

When it comes to first-time home buyer loans, the market is chock-full of choices. Do you want a fixed interest rate to keep things predictable? Or maybe a variable rate, hoping it might drop in the future? You can also consider split home loans. Read up more on home loan structure and other mortgage programs for first-timers like you.

4. Check Eligibility for Grants or Concessions

The Federal and state government’s offer First Home Owner Grants or other concessions to first-time buyers. These initiatives can significantly ease the initial financial burden of a property purchase and are designed to help people seamlessly purchase their first home. To find out more about first home owner grants or concessions in your area, visit your state government’s website for details. You can also consult a local mortgage broker who knows these grant programs and concessions like the back of their hands. 

5. Choose the Right Lender

While it might be tempting to go with the first lender you come across or the one your friend recommended, it’s wise to shop around. Compare the first home buyer mortgage terms, interest rates and other features of various lenders. 

When comparing rates, be sure to keep an eye on the comparison rate more so than the interest rate. The interest rate tells you how much interest you’ll be charged, while the comparison rate takes into account additional fees and charges, and presents it as a single rate. For example, you may have found a loan with the lowest interest rate, but if there are other fees associated with the loan, the comparison rate might be much higher than another product with a higher interest rate. 

home loan for first home buyers

6. Prepare Essential Documentation

Acquiring a home loan mandates several documents, ranging from proof of income and notice of assessments  to credit reports. Keep this in mind: being methodical expedites the process. Start by maintaining a digital repository of your fiscal documents. It will surely be a boon during the home loan process and an asset for personal financial management.

7. Gauge How Much You Can Borrow

Your borrowing capacity isn’t just based on your income. It’s also influenced by your outstanding financial obligations and habits, credit history (or lack of) and current credit products (such as credit limits on credit cards). So, make sure to understand your budget and where your money goes to gauge how much you might be able to afford to borrow. You can also use free mortgage calculators to have a better idea of your borrowing capacity. 

8. Seek a Home Loan Pre-approval

Want a better way to gauge your borrowing power? Seek a home loan pre-approval. A loan pre-approval gives an indicative amount of how much a lender is willing to lend to you. By being pre-approved, you have a solid idea of your budget for a home. It also places you in a strong negotiating position, as sellers are more likely to transact with buyers who have pre-approved home loans—even if it’s their first time in the real estate market. 

9. Don’t Underestimate the Role of a Mortgage Broker

A mortgage broker is your navigator, helping you chart the most favourable course through the expansive ocean of home loans. With their industry insights, they ensure you dock safely at the most advantageous port. Their expert guidance is especially beneficial if you’re applying for a mortgage for the first time. 

Take Your First Step Towards Homeownership Confidently

The journey to your first home is paved with decisions, and it’s essential to have the right partners by your side. Our seasoned Hobart mortgage brokers at Deltos Finance are committed to making your path smoother and more predictable. From unravelling complex loan terms to guiding you to the most beneficial loan structures, we’re here to empower your choices. So, why navigate the maze alone? Reach out to Deltos Finance today, and let’s lay the foundation for your first home together. 

Enquire Now

Find Your Perfect Finance Solution

Let's discuss your finance needs. We’re here to help.

More posts from Deltos Finance

property investment in Tasmania

Suburbs with the Highest Rental Yield in Tasmania

The term “rental yield” is music to any property investor’s ears. It’s the key metric that indicates the annual return on your investment, essentially the percentage of the property’s value that comes back to you in rental income. In a market like Tasmania, which has been gaining traction for its overall investment appeal, pinpointing the […]

launceston property market

Launceston: A ‘Second Wind’ Property Market You Should Invest in Now

When talk turns to Tasmania’s property scene, it’s easy for the spotlight to shine brightly on Hobart, with its bustling waterfront and historic charm. But just a little further north, nestled at the head of the picturesque Tamar Valley, lies Launceston—a city that quietly hits its stride and presents a compelling proposition for savvy property […]

property value increase

How Often Does Property Double in Value?

Every homeowner has likely dreamed of their property doubling in value in the future, turning into a valuable nest egg or funding their next big adventure. But how long does it actually take for a property to double in value? And how often does it happen? While there’s no magic eight-ball to predict the property […]

stamp duty exemption for first home buyers

Stamp Duty Exemption for First-Home Buyers in Tasmania: Has It Paid Off?

Purchasing a property has historically come with major financial difficulties, especially for first-home buyers in Tasmania or any other state for that matter. The stamp duty is one of those most notable monetary challenges for homebuyers. Essentially, it’s a tax levied on property purchases that often adds tens of thousands of dollars to upfront costs. […]

airbnb vs rental

Difference Between Airbnb and Traditional Renting in Hobart

Hobart’s property market has become a hotspot for investors largely because of its strong tourism demand and stable rental market. But that doesn’t mean all property investments in this Tasmania capital are a sure win. One factor to consider is deciding between short-term rentals like Airbnb and traditional long-term renting. Each option has distinct advantages […]

living in launceston tasmania

Is Launceston a Good Place to Live?

The short answer is yes, especially if you want a more affordable lifestyle without giving up access to key services, natural beauty, and long-term opportunities. Also, with its blend of heritage charm, steady economic growth, and a property market still within reach for many Australians, Launceston, Tasmania, is gaining momentum as a popular area for […]

property management fees

Hobart Property Management Fees: A Complete Guide

You’ve already secured an investment loan and finalised your rental property purchase in Hobart. Now, it’s time to take action by listing the property for rent and managing it effectively to start generating rental income. But how much should you expect to spend on property management in Hobart, Tasmania? As Tasmania’s capital continues to attract […]

house prices affect buying

How Rising Property Prices Affect Your Home Loan and Buying Potential

Here’s the good news: the Australian real estate market has been experiencing significant growth in recent years, with house prices in major cities reaching record highs. It can be a huge win for homeowners and investors, especially those planning to sell their properties soon. However, this can be an issue for potential property buyers, including […]

home equity loan

Build Your Wealth with a Simple Guide to Using Your Home Equity

Building wealth requires adopting the right mindset and being strategic when using available financial instruments. Essentially, it’s about making your money work in your favour. But what if you don’t have enough cash to start creating wealth? There’s an underutilised strategy that we want to share with you, and that is leveraging your home’s equity—the […]

interest rate cuts tips

Preparing for Interest Rate Cuts in 2025: Smart Moves to Take

The Reserve Bank of Australia (RBA) has cut rates for the first time since 2020, but several banks have yet to pass on cuts. The RBA interest rate cuts in 2025 can provide relief for borrowers and stimulate the property market. If you’re a homeowner or property investor, this presents a golden opportunity to reassess […]