Top 10 Steps in Your First Home Buying Checklist

Buying your first home in Toowoomba represents a significant milestone in your financial journey. The application process can feel overwhelming, but having a comprehensive checklist ensures you're prepared for every step. As experienced mortgage brokers, Wagstaff Finance understands the unique challenges first-time buyers face and the importance of proper preparation.

1. Assess Your Financial Situation

Before you begin house hunting, conduct a thorough review of your finances. This includes:

• Monthly income and expenses
• Existing debts and commitments
• Savings available for deposit and costs
• Banks statements from the last three to six months

Your financial situation directly impacts your borrowing capacity and determines which first time home buyer programs you might qualify for. Lenders will scrutinise these details during the application process.

2. Understand Your Borrowing Capacity

Your borrowing capacity represents the loan amount lenders are willing to provide based on your income, expenses, and financial commitments. This calculation considers:

• Your gross annual income
• Regular monthly expenses
• Existing loan repayments
• Credit card limits
• Employment stability

Mortgage brokers can access Home Loan options from banks and lenders across Australia, providing you with multiple scenarios to determine your realistic borrowing capacity.

3. Research First Time Home Buyer Schemes

Australia offers various first home owner grants (FHOG) and first time home buyer schemes designed to support new buyers:

• Home Guarantee Scheme: Enables eligible buyers to purchase with a smaller deposit
• First Home Owner Grant: Provides financial assistance for eligible first-time buyers
• Stamp duty concessions: Potential reductions in stamp duty for qualifying buyers

Each scheme has specific eligibility criteria and benefits. Research which programs apply to your situation and the Toowoomba property market.

4. Save for Your Deposit and Additional Costs

While some schemes allow smaller deposits, saving 20% of the property value helps you avoid lenders mortgage insurance (LMI). Your savings should also cover:

• Stamp duty (varies by state and property value)
• Legal fees and conveyancing
• Building and pest inspections
• Moving expenses
• Initial home setup costs

Remember that your loan to value ratio (LVR) affects both your loan approval and interest rate. A lower LVR often qualifies you for interest rate discounts and more favorable loan packages.

5. Get Pre-Approved for Your First Home Loan

Obtaining pre-approval provides clarity on your budget and demonstrates serious intent to vendors. The pre-approval process involves:

• Submitting financial documentation
• Credit assessment
• Property valuation (once you find a property)
• Conditional approval based on property purchase

Pre-approval typically lasts 90 days, giving you time to find the right property while knowing your financial limits.

6. Choose Between Variable and Fixed Interest Rates

Understand the difference between variable interest rate and fixed interest rate options:

Variable Interest Rate:
• Rate can fluctuate with market conditions
• Often includes features like offset account
• May offer more flexibility

Fixed Interest Rate:
• Rate remains unchanged for the fixed period
• Provides payment certainty
• Protection against rising rates

Some borrowers choose a combination of both through split loans.

7. Consider Loan Features and Benefits

Modern home loans offer various features that can provide long-term benefits:

• Offset account: Links your savings to reduce interest charges
• Redraw facility: Access to extra repayments when needed
• Repayment flexibility: Options for weekly, fortnightly, or monthly payments
• Portability: Transfer your loan to a new property

Evaluate which features align with your financial goals and lifestyle.

8. Research the Property Market

Understand the Toowoomba property market conditions, including:

• Average property prices in your preferred suburbs
• Market trends and seasonal variations
• Infrastructure developments affecting property values
• Rental yields if considering future investment potential

This knowledge helps you make informed decisions and realistic offers.

9. Engage Professional Support

Assemble your support team early in the process:

• Mortgage Broker: Access to banks and lenders nationwide with streamlined application process
• Conveyancer or Solicitor: Handle legal aspects of the purchase
• Building Inspector: Assess property condition
• Accountant: Advise on financial implications

Professional guidance can save time and potentially thousands of dollars.

10. Plan for Settlement and Beyond

Once your offer is accepted, prepare for settlement:

• Final loan approval and documentation
• Property valuation and final inspections
• Insurance arrangements
• Utility connections and transfers
• Moving arrangements

Consider your long-term plans too. If you're thinking about investment loan options in the future, discuss how your first home purchase might affect your first investment property plans.

Successfully buying your first home requires careful planning and professional guidance. With proper preparation and the right support, you can move through the application process confidently and secure a home loan that suits your needs and budget.

Call one of our team or book an appointment at a time that works for you to discuss your home buying journey and explore the loan options available through our extensive lender network.