Buying your first home is a major milestone, but there are some common difficulties first-time homebuyers can face throughout the process.

Without the right guidance, the process of securing your first mortgage can feel overwhelming and, sometimes, confusing. This post will give you an idea of the top three challenges you could face while trying to secure a loan for your first home. We’ll also provide some actionable tips for first-time homebuyers that can help you navigate these challenges, all insights from the LiveInvest team.

1. Saving for a Deposit

Probably the biggest obstacle for first-time homebuyers is saving enough for a deposit. With rising property prices, many feel they’ll never reach the required amount and give up. Others may save a considerable amount but fall in love with a home that’s out of their budget.

Overcoming this Challenge:

• Explore Low-Deposit Options: Some lenders offer loans with low deposit requirements, some as low as 5%. However, these may require lenders’ mortgage insurance (LMI).
• Check Government Schemes: Thankfully, there are several assistance programs set by the Australian government that can help reduce the deposit required or eliminate the need for LMI. Some of these programs are the First Home Owner Grant (FHOG) and First Home Guarantee.
• Set a Realistic Budget: Follow a savings plan that focuses on eliminating unnecessary expenses and automating your savings contributions. Understand how much you’re willing to pay for a home, and see what features and amenities can move from the needs column to the wants column.

2. Understanding the Mortgage Process

The process for your first mortgage can be confusing, especially with all the paperwork, terms, and loan options. If you’re financially inexperienced or simply don’t have the full knowledge of how mortgages work, you could miss out on taking advantage of certain opportunities.

Overcoming this Challenge:

• Work with a Mortgage Broker: Brokers like LiveInvest provide expert first-time property advice, helping you understand loan types, interest rates, and fees. They also compare lenders to find one suitable for your situation.
• Educate Yourself: Familiarise yourself with basic mortgage terms to have a better understanding of the general process.
• Ask Questions: Don’t hesitate—if there’s something you don’t understand, ask for clarification from your broker or lender. We’ll be happy to help!

3. Unexpected Costs

First-time buyers will often focus on saving for the deposit and organising their finances for their mortgage, but they underestimate the extra costs involved in purchasing a home, like stamp duty, legal fees, and moving expenses.

Overcoming this Challenge:

• Create a Full Cost Estimate: Work with your broker to list all potential expenses, including upfront costs.
• Use First-Home Buyer Concessions: Many states offer stamp duty concessions for first-time buyers, which can reduce your costs.
• Set Up an Emergency Fund: Expect the unexpected! Avoid financial strain during the buying process and the start of your homeowner journey by having an emergency fund.

Final Tips for First-Time Homebuyers

• Get Pre-Approval: Secure pre-approval for your loan to know your borrowing capacity before you go house hunting.
• Stay Realistic: Focus on properties within your budget, even if the idea of a pool and a sizeable backyard seems enticing.
• Seek Professional Guidance: The right mortgage broker can make the process smoother, helping you avoid common mistakes and secure a loan tailored for you.

Take the Stress Out of Your First Mortgage

It’s normal to encounter challenges as a first-time homebuyer, but with proper planning and the right advice, you can easily overcome them. The LiveInvest team specialises in helping first-time buyers navigate any first home loan challenges so they can get the property they’ve always wanted.

Contact us today for first-time property advice and personalised loan guidance. Your dream home is closer than you think!