Top 8 Tips for First Home Buyers Purchasing a Unit

Understanding Your Financial Situation as a First Home Buyer

Purchasing your first home is a significant milestone, and for many Brunswick residents, buying a unit represents an accessible entry point into the property market. Understanding your financial situation forms the foundation of a successful home loan application. Your borrowing capacity depends on various factors including your income, expenses, existing debts, and employment stability.

When applying for a home loan, lenders assess your loan to value ratio (LVR), which represents the percentage of the property's value you're borrowing. For first time home buyers, an LVR of 80% or less typically avoids the need for lenders mortgage insurance (LMI), though this isn't always necessary to secure approval.

Exploring First Time Home Buyer Programs and Schemes

Australia offers several first time home buyer schemes designed to assist people entering the property market. The Home Guarantee Scheme enables eligible first home buyers to purchase with a deposit as low as 5%, with the government guaranteeing part of the loan to avoid LMI costs.

First home owner grants (FHOG) provide financial assistance, with amounts varying between states. These grants can significantly reduce the upfront costs associated with buying your first home. Additionally, many states offer stamp duty concessions or exemptions for first home buyers, particularly for properties under certain value thresholds.

Access to Home Loan Options from Banks and Lenders

Working with experienced mortgage brokers provides access to home loan options from banks and lenders across Australia. Rather than being limited to one institution's products, you can compare packages from numerous lenders to find terms that suit your circumstances.

This access to banks and lenders nationwide means you can explore:

• Variable interest rate options that fluctuate with market conditions
• Fixed interest rate loans providing payment certainty for set periods
• Interest rate discounts based on your profile and chosen features
• Offset account facilities to reduce interest charges
• Various loan amounts suited to unit purchases in Brunswick

The Application Process for Your First Home Loan

The application process involves several steps, beginning with getting pre-approved for your loan amount. Pre-approval provides confidence when making offers and demonstrates to sellers that you're a serious buyer. The streamlined application process typically requires:

1. Income verification through payslips and employment letters
2. Bank statements showing your savings history and spending patterns
3. Identification documents and proof of assets
4. Details about the unit you wish to purchase

Benefits of Unit Purchases for First Time Buyers

Units often present several benefits for first home buyers, particularly in areas like Brunswick where the property market can be highly competitive. Lower entry prices compared to houses make units more accessible, while ongoing maintenance responsibilities are typically reduced through strata management.

Many units are located close to public transport, shopping centres, and employment hubs, making them attractive for young professionals. The smaller loan amounts required for unit purchases can also mean lower ongoing repayments and reduced financial pressure.

Understanding Interest Rates and Loan Features

Interest rates significantly impact your weekly and monthly repayments, making it crucial to understand the difference between variable and fixed options. Variable interest rates can change during your loan term, while fixed rates remain constant for agreed periods, typically one to five years.

Many lenders offer interest rate discounts for first time home buyers, particularly when you meet certain criteria such as maintaining a specific LVR or choosing particular loan features. An offset account can also reduce the interest charged on your loan by offsetting your savings balance against the outstanding loan amount.

Maximising Your Investment Potential

While purchasing your first home primarily serves as your residence, considering its potential as your first investment property in future can influence your choice. Units in well-connected areas like Brunswick often have strong rental demand, providing flexibility if your circumstances change.

Those considering investment loan options should understand that different criteria apply, including higher deposit requirements and different interest rate structures. However, establishing a relationship with lenders through your first home purchase can benefit future investment loan applications.

The expertise provided by professional mortgage brokers ensures you understand all available options and choose loan features that align with your long-term goals. From initial borrowing capacity assessments through to settlement, professional guidance helps you make informed decisions about this significant financial commitment.

Call one of our team or book an appointment at a time that works for you to discuss your first home buying journey and explore the loan options available for your Brunswick unit purchase.