7 tips for first-time home buying in Melbourne

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Consolidating your debt. Applying for mortgages. Working out a proper budget. A lot of preparation goes into the home buying process.

Are you looking for a quick guide to buying your first home in the Melbourne property market? We’ve got you covered. Keep reading for our seven top tips for first-time Melbourne home buyers.

Looking for a more thorough guide? You’ll find all of our favourite strategies and some of the key insights we offer clients when you download our free e-book today.

1. First, find out if you qualify for a home loan

If you’ve come here for tips on buying your first home, you might already think that you’re eligible for a home loan. Maybe you are. Maybe you’re not. There’s only one way to know for sure.

Before you delve deeper into the process of becoming a first-time home buyer in Melbourne, find out if you prequalify for a home loan, first.

While you’re at it, get in touch with several lenders to find out how much money you’ll actually be able to borrow if you do qualify. Only after you know your ballpark price range can you understand what type of Melbourne residential property (and in which locations) you can afford to buy.

Check out this eligibility tool to help estimate how much you might qualify for with our help.Image of houses and residential property in Melbourne Australia

2. Research the different types of home loans available

Know your options! It’s can be overwhelming – or just plain complicated – to browse the different home loans available for the Melbourne property market. However, it’s very important that you put the effort into comparing, side-by-side, as many types of home mortgages as possible. This is the only way to ensure you get one with the right features and rate that you need.

Some loans have fixed-rates and others have variable rates. Some loans are principle and interest loans – more common for home buyers. Other loans offer interest-only terms – more common for investors.

Get in touch with us for a free consultation if you’d like some personalised guidance to work out the most suitable mortgage loan for you.

3. Figure out how much you can put down on your home loan deposit

Why does this matter? The more money you’re able to put up front on a home mortgage, the more money you can borrow. Plus, if you can come up with a greater down payment, you’ll qualify for other types of loans with lower interest rates.

Many first-time home buyer mortgages are available in Melbourne with a deposit of five or ten percent, but if you have a 20 percent deposit, you won’t have to pay lender’s mortgage insurance.

4. Sort out your debts before you apply for a home mortgage loan

It’s hard to climb onto the property ladder if you’re mired in debt. It’s vital that you don’t ignore any bad credit issues that may affect your application. In this guide to buying your first home, perhaps the most important tip for first-time Melbourne home buyers is to focus on paying off large debts and getting your credit sorted out before applying for a home loan.

Focus on paying off your debts with the highest interest rates first. Also, explore your options for combining some of your debts into one for one easier, lower monthly payment.

Image of houses and residential property in Melbourne Australia5. Figure out exactly how much you’re able to pay for your monthly mortgage

It’s less likely following the Hayne royal commission, but the amount a mortgage loan company is willing to give you may still differ from how much you are actually able to service.

Pull out a calculator and give serious thought to your household budget. Allocate just as much as you know you’re able to pay for a property mortgage before you begin negotiations.

Also, it can pay to consider future changes in interest rates. How much would you need to pay in a worse case scenario – are you comfortable with this?

6. Hire professionals for help with securing your home mortgage if needed

One of the best first-time home buying tips we can give you is to reach out for professional help as needed. Investing in the right guidance can pay dividends in the long run. Your options here include:

    1. Buyers agents, who help first-time homebuyers with every step of the process
    2. Mortgage brokers, who are there to help you get the right loan for your situation
    3. Conveyancers, who can be hired to help carefully review your contract

7. Secure the most suitable interest rate possible following our top mortgage negotiation tips:

    1. Do your research and check out home loans from several mortgage lenders and banks to see what type of rates they offer.
    2. Ask to speak to the retention team of a home loan provider who offered you a deal. Tell them that you have been given a rate, but you’re looking for a better rate with their company rather than choosing another mortgage lender. You might be surprised what they can do for you.
    3. Look for special offers of lower interest rates for first-time homebuyers.
    4. Be ready to switch banks or lenders in order to go with the home mortgage lenders with the most suitable rates for first-time homebuyers.

Ready to start exploring your options as a first-time home buyer in Melbourne?

You’re in the right place. If you’re looking to buy residential property in Melbourne, talk with one of our home mortgage experts and find out how we can help. Book your free consultation today.

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