What First Home Buyers Need to Know About Buying a House

Understanding Your First Home Buyer Journey

Purchasing your first house is an exciting milestone, and if you're looking in Davoren Park, you're exploring an area with genuine potential for first home buyers. The process might seem overwhelming at first, but understanding what's available can help you make informed decisions about your future.

As a first home buyer, you'll have access to various government schemes and loan options designed specifically to help you enter the property market. From low deposit options to stamp duty concessions, there are multiple pathways to homeownership.

First Home Buyer Eligibility Requirements

Before diving into property searches, it's important to understand first home buyer eligibility criteria. Generally, you'll need to:

• Be an Australian citizen or permanent resident
• Be at least 18 years old
• Have never owned property in Australia before
• Intend to live in the property as your primary residence
• Meet income thresholds set by government schemes

These requirements apply to most government assistance programmes, though specific schemes may have additional criteria.

Government Schemes and Grants Available

South Australian first home buyers can access several valuable schemes:

First Home Owner Grant (FHOG)

This grant provides financial assistance when purchasing or building a new home. The amount varies depending on whether you're buying an established home or building a new property.

First Home Loan Deposit Scheme

This scheme allows eligible first home buyers to purchase with just a 5% deposit, with the government guaranteeing up to 15% of the property value. This means you can avoid paying Lenders Mortgage Insurance (LMI), which can save you thousands of dollars.

Regional First Home Buyer Guarantee

For those purchasing in regional areas, this scheme offers similar benefits to the standard First Home Loan Deposit Scheme, with potentially higher property price caps.

First Home Super Saver Scheme

This initiative allows you to save for your deposit using your superannuation, with tax benefits that can help you accumulate your deposit faster.

First Home Buyer Stamp Duty Concessions

Stamp duty can represent a significant upfront cost when buying your first home in Davoren Park. South Australia offers generous first home buyer stamp duty concessions, which can either reduce or eliminate this expense entirely, depending on the purchase price.

These concessions can save you several thousand dollars, making homeownership more accessible and leaving you with more funds for moving costs and settling into your new property.

Establishing Your First Home Buyer Budget

Creating a realistic first home buyer budget is crucial for a successful purchase. Consider these key components:

1. Deposit: While schemes exist for 5% deposit and 10% deposit options, saving a larger amount reduces your loan size and interest payments
2. Stamp duty: Even with concessions, factor this into your budget
3. Conveyancing fees: Legal costs for property transfer
4. Building and pest inspections: Essential for protecting your investment
5. Moving costs: Removalists, utility connections, and immediate home needs
6. Ongoing costs: Council rates, insurance, utilities, and maintenance

A gift deposit from family members can help boost your savings, though lenders will require documentation showing the funds are genuinely a gift rather than a loan.

Home Loan Options for First Home Buyers

When you apply for a home loan, you'll encounter various home loan options. Understanding these helps you choose what suits your circumstances:

Interest Rate Types

• Variable interest rate: Fluctuates with the market, offering flexibility with features like an offset account and redraw facility
• Fixed interest rate: Locks in your rate for a set period, providing payment certainty
• Split loans: Combines both fixed and variable portions

Many lenders offer interest rate discounts for first home buyers, particularly when you're purchasing in growth areas.

Low Deposit Options

Beyond government schemes, various lenders offer low deposit options that may require LMI but still allow you to enter the market sooner. Understanding Lenders Mortgage Insurance (LMI) helps you weigh the costs against the benefits of purchasing sooner.

The Home Loan Application Process

Your first home loan application involves several steps:

1. Get pre-approval: This gives you a clear budget and shows sellers you're serious
2. Gather documentation: Payslips, tax returns, bank statements, and identification
3. Property search: Find a house within your budget
4. Make an offer: Negotiate terms with the seller
5. Formal application: Submit your full first home loan application
6. Property valuation: The lender assesses the property value
7. Approval and settlement: Finalise your loan and complete the purchase

Getting loan pre-approval before you start house hunting is highly recommended, as it streamlines the process once you find the right property.

First Home Buyer Checklist

Use this first home buyer checklist to stay organised:

• Check your credit score and address any issues
• Calculate your borrowing capacity
• Research government schemes and eligibility
• Save your deposit and budget for additional costs
• Obtain pre-approval for your home loan
• Engage a conveyancer or solicitor
• Arrange building and pest inspections
• Review loan features like offset account and redraw facilities
• Organise home and contents insurance
• Plan for settlement day

Understanding Loan Features

When comparing first home loan options, consider these features:

Offset Account

An offset account is a transaction account linked to your loan. The balance reduces the amount you pay interest on, potentially saving you thousands over the loan term while keeping your funds accessible.

Redraw Facility

A redraw facility lets you access extra repayments you've made on your loan. This provides flexibility if you need funds for emergencies or home improvements.

Repayment Options

Most first home buyers choose principal and interest repayments, which reduce your loan balance over time. Understanding your repayment obligations helps you budget effectively.

Why Use a Mortgage Broker

Navigating the array of lenders, products, and schemes can be challenging. A mortgage broker specialising in first home buyers can:

• Compare home loan options from multiple lenders
• Identify suitable government schemes
• Handle your first home loan application
• Negotiate interest rate discounts
• Explain complex terms and features
• Support you through to settlement

At Simple Lending, we understand the local Davoren Park market and can help you explore properties and loan options that match your circumstances. We'll work with you to maximise your government entitlements and find competitive lending solutions.

Making Your First Home Purchase

When you're ready to proceed with buying your first home, having professional guidance can make the difference between a stressful experience and a smooth transition into homeownership. From understanding your borrowing capacity to finalising settlement, every step matters.

The journey from first home buyer to homeowner involves careful planning, informed decisions, and access to the right financial products. Whether you're looking at low deposit options through government schemes or have saved a larger deposit, the key is finding a loan structure that supports your long-term financial wellbeing.

Remember that purchasing property is one of the most significant financial decisions you'll make. Taking time to understand your options, seek professional advice, and carefully review your budget will position you for success.

If you're ready to take the next step toward buying your first house in Davoren Park, the team at Simple Lending is here to help. We'll guide you through the home loan application process, help you understand which schemes you're eligible for, and work to secure a loan that meets your needs. Call one of our team or book an appointment at a time that works for you.