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8 First Home Buyer Tips to Make the Process Simple and Stress-Free

Disclaimer: The information on this page is general information only. It should not be taken as professional advice. Montgomery Homes is not a financial adviser and you should seek independent legal, financial or other advice to check how the website information relates to your unique circumstances.

first home buyers

Becoming a homeowner for the first time is one of the biggest investments you’ll ever make, and a valuable one at that!

As a first time homeowner, the home building (or buying) process can be a little overwhelming. There are so many options to choose from - you can buy a pre-existing home or you can build a fresh home that's customised to you; you can compare home loans and rates, or consider a guarantor.

The options are endless!

We want to make the process simple so you can have an exciting, memorable experience building a new home. In this first time buyer blog, we share eight essential first home buyer tips so you can feel confident navigating your new home purchase. Read on!

#1. Get a financial health check-up

Before purchasing a new home, the first thing you’ll need to do is find out if you can afford it. Browsing through home designs and real estate listings online can send hopes soaring sky high, but it’s important not to let the excitement cloud your judgement.

While house (or home design) hunting, we recommend getting a financial health check-up. There are a couple of options here:

  • Sit down and list out all of your weekly/fortnightly/monthly expenses. How much are you spending vs. how much are you saving? To achieve your dream home, is there anything you’ll need to sacrifice or spend less on?

    Are you paying insurance for anything? How much are you spending on takeaway food each month and do you need to cut back in order to save money?

    These are all important questions to ask yourself. If you know how much you’re spending and saving, you’ll have a better idea of how much you can contribute to your future mortgage each week, fortnight, or month.

  • Talk to a financial planner. If you need some professional help sorting out your finances, we recommend talking to an experienced financial planner to help map out the future. A financial planner will take the stress out of the home buying process, provide you with financial first home buyer advice and balance out your finances to make it more manageable.

    It’s also important to remember the deposit for a new home is around 10% - 20%, so make sure to have lots of savings in the bank before making the leap into home ownership and make a plan to manage mortgage payments in the not-too-distant future.

    Plus, if you live in NSW, you may qualify for the NSW Home Guarantee Scheme which requires a deposit of only 5% to purchase or build a new home without lenders’ mortgage insurance. 

#2. Look into the First Home Owner Grant

For aspiring homeowners, it’s definitely worth looking into any government grants or schemes for your new home build or purchase. Keep an eye out for any restrictions in the fine print that may prevent your eligibility.

As a first homeowner, you could be eligible for the First Home Owner Grant of $10,000. There’s some fine print to the First Home Owner Grant:

  • You must be over the age of 18 and an Australian citizen.
  • Your new home must have a total value less than $600,000.
  • Your land and home must have combined values less than $750,000.
  • You have not built or purchased a new home in the past, or received the First Home Owner Grant in the past.

Refer to the NSW Government website for the latest grants for your new home!

#3. Find out if a parent or guardian can be a guarantor

Looking to unlock extra benefits and discounts? Don’t have enough cash for a deposit? You also have the option of making a parent or guardian your “guarantor” for the purchase.

A guarantor can use their own property as security to guarantee either the entire loan or a portion of it. Your parent or guardian will be responsible for the loan in case you can’t make repayments, lowering the borrower’s risk in the eyes of the bank or lender.

There are a range of benefits to assigning a guarantor to a loan:

  • You can borrow up to 105% of the property value
  • You can purchase a home sooner rather than later
  • You can avoid the cost of lender’s mortgage insurance
  • You can unlock better loans with better rates

Once you’re feeling financially stable enough to take on the payments on your own, you can apply to have the guarantor removed.

#4. Look into how much you can borrow from the bank

After taking a good look at your finances and exploring possible avenues to reduce costs, the next step is to determine how much you’ll need to borrow for your new home build (or purchase).

You might have an idea of how much you’ll need to borrow based on the home designs you’ve been admiring online. From here, you can either head into the local branch of your bank and speak to a home loan officer, or you can head online and use their home loan calculator for a ballpark estimate.

Most banks have a home loan calculator on their website:

Remember, these are estimates only. We recommend speaking with your bank, broker, or conveyancer for a more accurate estimate of what you can borrow.

#5. Create a budget for your new home build

Once you have an idea of how much money you can borrow, if you are eligible for any grants, and if you have a guarantor, you can set yourself a budget and aim to stick to it.

For example, the bank might offer a $600,000 loan, so you might aim for a home design of $450,000 - $500,000 so you have plenty of room for upgrades, changes to your home design, or even for furniture, decorations, and landscaping once your home is ready to move into.

It all comes down to how much you’re allowed to borrow and how much you’re willing to spend. Plus, a budget can help keep things balanced and realistic, so you don’t go spending more than you can pay for!

#6. Consider what kind of home is best for you - and start shopping!

We’ve come to the exciting part… Getting serious about house hunting! You’ve probably been browsing home designs and real estate listings for a while now, but it can be hard deciding which house is the right choice for you.

Here are a few things to consider when house hunting online:

  • How far will you have to travel or commute for work and study?
  • How far will you have to travel to see friends and family?
  • How many parking spaces will you need?
  • How many bedrooms will you need?
  • How often will you have guests?
  • Will you need a granny flat in the backyard for guests?
  • Will your parents need somewhere to live in the future?
  • Will you need room for kids in the future, or room for a growing family?
  • Will your kids need to walk to school or commute?

The trick is to create a list of “must-have” items for your new home and narrow down your choices. Your dream home will present itself before you know it.

#7. Determine whether you want to buy or build

In the house hunting process, you’ll also have to decide whether building or buying is a better option for you. There are pros and cons to both - for example, if you buy a pre-existing home, you can move in almost straight away. However, buying a pre-existing home also has the disadvantage of needing potential renovations and work straight off the bat which can push the overall price up.

If you’ve been browsing through real estate listings online and can’t find the perfect home, building might be the better option for you.

At Montgomery Homes, we’re committed to building the home you’ve always dreamed of. You can take our home designs and customise one to match your lifestyle - for example, you might choose to rearrange where the bedrooms are placed on the floor plan, invert the floor plans, or swap an entertainment area for a home gym.

You also have the option of purchasing one of our architectural house and land packages! Complete with a block of land and a home design of your choosing, you can eliminate the stress of finding land to build on.

Plus, we’ll give you plenty of tips for first home buyers so you can feel confident throughout the process! 

We want to make your first home build simple and stress-free. Get in touch with our team to discuss your options today.

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#8. Make sure to get home and contents insurance

Once you’ve found your new home, signed the contracts, and placed a deposit, it’s time to think about home and contents insurance. This can happen in the lead up to the move-in date, or after you’ve moved in. However, we recommend looking into insurance sooner rather than later to protect your home and belongings.

Home insurance covers the structural elements of your home - the walls, windows, roofing, and other on-site structures like garages and driveways. Depending on your location, most banks and insurance companies will cover you for floods, storms, lightning strikes, earthquakes, and sometimes even meteorites!

You can also be covered for burglaries, vandalism, and damage from animals that aren’t yours.

Contents insurance, on the other hand, covers everything inside your new home like furniture, appliances, collectables, jewellery, and other valuables.

There are lots of options out there to choose from - compare the market and find the best option for you.

Need some more first home buyer tips? Take the hassle out of building your first home with Montgomery Homes

We’re the number one choice for architectural home building in Newcastle, the Central Coast, and Sydney. Our friendly and professional team will be with you every step of the way.

Consider us your first home buyer guide - get in touch today for more first home buyer tips!

We make building your first home a breeze — Contact our team today!

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