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Step-by-step guide: Securing your first home loan with a Melbourne broker

ByAndrew Mirams

1. Hold your horses

When you’ve made the decision to buy your first home, it’s tempting to race off and start scrolling through listing websites to find the perfect property. But wait. There are some important things you need to do before you fall in love with a property.

Before you start browsing, it’s important to figure out your budget and your borrowing power.

Your budget depends on a few things:

  • Your income.
  • Your expenses (don’t forget things like Netflix, Afterpay, travel, nights out and weekend brunches).
  • Your existing debts (like HECS-HELP or car loans).
  • Your credit history.

A good mortgage broker can run the numbers and give you a realistic ballpark of how much you can borrow – and how much you should borrow. Just because a bank says yes to a big loan, doesn’t mean it’s the smartest move.

And a broker can fill you in on all those expenses a lender won’t like to see. Buy now, pay later is particularly unpopular. It’s a good opportunity to get on top of any potential stumbling blocks.

2. Start saving early

Generally speaking, you’ll need a deposit of at least five per cent of the purchase price at a minimum. Aiming for 20 per cent means you can avoid paying costly lenders’ mortgage insurance, which adds thousands to your loan.

But first home buyers can often buy with less than 20 per cent. It’s even possible in a pricey market like Melbourne. So, don’t stress if you’re not quite there. There are options.

Don’t rest on your laurels though. Save. Save early and save often. Lenders expect to see a history and pattern of genuine savings, which is money you’ve consistently set aside over several months. It shows you’re financially responsible and ready to handle mortgage repayments.

3. Understand the grants on offer

One of the perks of being a first home buyer in Australia is that there are a range of grants and schemes at your disposal to help make the experience a little cheaper.

Talk to us about what you could be eligible for. There are often changes to existing programs and entirely new ones, especially around election time, so get the latest information and advice.

But here’s a snapshot of what’s possible in Victoria

  • If you’re buying or building a brand-new home valued up to $750,000, you may be eligible for a $10,000 grant. This can be a big boost to your deposit or help cover costs.
  • If your property is valued at $600,000 or less, you could get a full stamp duty exemption. That’s a huge saving. For homes purchased for up to $750,000, you could still score a concession.
  • The First Home Guarantee offers the chance to purchase with just a five per cent deposit without paying LMI. The Federal Government guarantees the rest. There are strict criteria so talk to us about whether you’re eligible.

4. Get pre-approval first

Pre-approval is like a green light from the lender that means they’ve looked at your financials and are willing to lend you a certain amount, subject to a few final checks.

Why it matters:

  • You’ll know exactly what you can afford.
  • It shows sellers you’re serious.
  • You can act quickly if the right place pops up.

Pre-approval usually lasts three to six months. When you find your dream first home, you’re ready to act quickly and with certainty – and you’ll save a whole stack of paperwork.

5. Work with a mortgage broker

You could absolutely go to your current bank and apply for a home loan directly. But it limits your options dramatically and might mean you miss out on better rates, discounts and features.

A mortgage broker works for you. They go out into the home loan market to examine every mortgage on offer from all lenders, including banks, specialist lenders and credit unions.

It means we can:

  • Match you with lenders that favour first home buyers.
  • Help you compare interest rates, fees and loan features.
  • Get you the lowest possible interest rate.
  • Guide you through the paperwork (and there’s a lot of it).

The best part? Our service is free for you. The lender pays us – not you.

6. Think beyond just the interest rate

Of course, the interest rate is important – and a low one is what everyone wants. But there’s much more to a home loan than that.

There are other mortgage features worth considering that a broker can help you navigate, such as:

  • Offset accounts to reduce the interest you pay.
  • Redraw facilities for flexibility when you make extra repayments.
  • Split loans – for a mix of fixed and variable rates.

We can help you figure out what’s worth paying for and what’s just bells and whistles you don’t need.

7. Get your paperwork ready

We can tell you exactly what you’ll need, but applying for a home loan (and your pre-approval for that matter) will require some documentation. For starters, it’s your identification, pay slips, bank statements and tax returns. It’s a little trickier if you’re self-employed, but don’t fret – we can help.

8. Be prepared for the extras

The purchase price of your first home isn’t the only expense you’ll incur. There are other requirements of the process that come with a price tag. These include stamp duty, unless you’re exempt, conveyancing fees, building and pest inspection reports, loan application fees, and lenders’ mortgage insurance, unless you have a 20 per cent deposit.

Once again, we can help you to understand exactly how much will be needed.

9. Stay calm

It’s a lot, but it’s well worth it. Things might not go quite to plan all of the time, but that’s just part of the process. Buying your first home is a bit of a rollercoaster.

With the right support, the right advice and information, and all of your homework done, it doesn’t need to be a huge hassle.

What matters is having the right support, realistic expectations, and a solid game plan.

Whether you’re just starting to save, want to understand what you can borrow or you’re ready to apply, let’s have a chat. No pressure, no jargon. Just real advice that helps you take the next step with confidence.

Andrew Mirams
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