First Home Buyer’s Guide for 2024 | Part 3

Self-Employed | 16 Feb, 2024

Welcome back to this third and final instalment of our First Home Buyer’s Guide for 2024. In parts 1 and Part 2 we covered a lot of considerations that could help you achieve your goal of buying a home in 2024. From understanding the government schemes available, to finding ways to increase your savings, our tips will already have put you in a stronger position to buy your first home this year.

However, we certainly would be leaving a huge gap in any guide for first time home buyers if we didn’t discuss how to best understand and utilise the many lender options and how to make the most out of your application and the lender process.

Let’s get started!

First Home Buyer’s Guide for 2024 – Part 3

couple smiling while carrying boxes into their new first home for guide for first time home buyers

Understanding your lender options

When it comes to getting your first home loan and getting into your first home, it pays to understand lenders. This includes both non-bank lenders and bank lenders. And there’s no one that knows more about lenders than mortgage brokers.

Between April and June 2023, mortgage brokers wrote 67.2% of all new residential home loans. Yet a 2023 report indicated that many first home buyers don’t bother speaking to a mortgage broker prior to trying to go out and get in loan.

In fact, only about 44% go the mortgage broking route. Instead, the other 56% are choosing to seek financing via a proprietary channel where they have an existing relationship. In other words, they may have been banking with CBA for years, so rather than explore their options, they simply ring up CBA to see what mortgage products they have on offer.

Why is this? While there are many factors at play here, one if likely the fact that the age of first home buyers is increasing, as noted in part 1 of our guide for first time home buyers. Older buyers tend to be less risk tolerant. Because of that they’re more inclined to choose to work with a lender that they know well and trust.

While this approach can definitely have its benefits, it eliminates the cost savings and other opportunities that could be found going with a non-bank lender or a smaller bank. And these other lenders won’t necessarily be more risky at all.

A mortgage broker is the expert you need to really understand your options when it comes to lenders. Unlike a proprietary channel, where you might be able to consider a few different mortgage products, brokers will have 40 or 50 different lenders on their books with hundreds of different loan products. They’re perfectly placed to help you find the right product and the best value for your specific situation.

Know how to best complete your loan application

Another way to understand lenders is to know what they’re looking for on their loan applications. And knowing what they want to see on their applications will put you in a much better position to lock down a good deal on a home loan.

Ultimately the lender just wants to see that you’re a good candidate for a loan. And that you will have the capacity to pay it off. Your application can show them that.

Some things that lenders will look at in your application are:

  • Your debt and income.
  • Whether you have steady employment. If you’re self-employed this could prove a bit tricky, but our team can help you with this!
  • Your ability to save (as discussed above).
  • Your financial commitments. For example, do you pay monthly parental support?
  • The limit you have available on your credit cards. Even if you have a zero balance, they’ll still consider the limit as ‘accessible credit’. Keep this low if possible.
  • Behavioural indicators such as whether you use in-store credit, instalment payment plans or even AfterPay.
  • Your spending habits.
  • Whether you have paid your current debts on time.

Ensuring that you’re in a strong position when answering those questions and providing that information is one of the best things you can do to get on the property ladder in 2024.

Use a mortgage broker

The fact that most first home buyers aren’t seeking out mortgage brokers – yet over 67% of all home loans are being written by mortgage brokers also tells us something about what mortgage brokers can do. And that is, actually get you a home loan. That’s because they understand lenders. And when you become a mortgage broker client they will work to understand you (and help you better your position if necessary!).

This guide for first time home buyers is for you!

If you think that getting on the property ladder is out of reach for 2024 that’s definitely not true. This guide for first time home buyers is for you. Take the steps laid out in Parts 1, 2 and 3 and you’ll be in a stronger position than ever.

If you’re a first home buyer, we’d love to help you get over the hump and into a home! Get in touch with Stapleton Finance today.

Sharing is caring!

Related Content

Step by Step: The Home Finance Journey

Are you dreaming about purchasing your own home but have no idea what the financial process is? You’re not the only person to feel lost when it comes to understanding what actually happens when looking to secure a home loan. In fact, we regularly field calls from first-time home buyers asking about the home finance […]

Read More

Get a leg up the property ladder with LongView’s Buying Boost

LongView Buying Boost helps you get on the property ladder by ‘boosting’ your equity and helping you through the buying process. Here’s how! The ‘great Australian dream’ has long been for every Australian family to own their own home. But unfortunately it’s not always as simple today as it may have been 20, 30 or […]

Read More

Your Guide to the New First Home Guarantee Scheme

Does buying your first home feel like an impossible dream? Given the current state of the market and the cost-of-living crisis, it’s not surprising that many aspiring first home buyers feel like their first property is out of reach. Fortunately, the Australian Government has offered new hope to those who wish to purchase their first […]

Read More