What does a mortgage broker do for a first home buyer?
Buying your first home comes with plenty of questions. How much can you borrow? How much deposit do you need? Which lender should you approach? And what actually happens once you find a property?
A mortgage broker can help you work through those questions, understand your borrowing position, compare home loan options and navigate the lending process from the early planning stages through to settlement.
A big part of the job is helping you understand what comes next, what lenders may look at and what you can do to get yourself ready to buy.
If you're at the beginning of the journey, our first home buyer home loan page is also a useful place to start.
What can a mortgage broker help a first home buyer with?
Every buyer's situation is different, but there are a few parts of the process where having a broker in your corner can be particularly useful when you've never bought a home before.
Working out your borrowing position
Before you get too attached to a property, a broker can help you understand how lenders may assess your income, living expenses, debts, financial commitments and deposit.
Making sense of your deposit
Your deposit can affect your loan-to-value ratio, the lenders available to you and whether lenders mortgage insurance may apply. A broker can help you understand what those numbers mean for your situation.
Comparing home loan options
Instead of simply walking into one bank, a broker can compare options from the lenders they work with and discuss which loans may suit your circumstances and what you're trying to achieve.
Getting ready for pre-approval
If pre-approval is appropriate, a broker can explain what information a lender is likely to need and help you prepare the application.
Explaining what's actually happening
Loan applications come with plenty of terminology and paperwork. Having someone explain the process can make it much easier to understand where things are up to and what needs to happen next.
Helping through to settlement
Getting the loan application submitted isn't necessarily the end of the broker's role. They can continue helping with the lending side as you move towards approval and settlement.
How much can you borrow as a first home buyer?
It's usually one of the first questions that comes up, and it's an important one to answer before you spend too much time scrolling through property listings.
Lenders consider a range of factors when assessing how much they may be prepared to lend, including your income, living expenses, existing debts and other financial commitments.
Different lenders can also assess the same borrower differently, which is one reason your borrowing capacity isn't necessarily one fixed number.
If you want to get an initial idea, try our borrowing power calculator.
Borrowing power and buying budget aren't the same thing
A lender may be prepared to lend you a certain amount, but that doesn't automatically mean you need to spend it.
Think about the repayments you're comfortable carrying, your normal living expenses and what you want life to look like after you've bought the property.
Don't forget the other costs of buying
Your deposit isn't necessarily the only amount you'll need to have available.
Depending on the purchase and your circumstances, there may also be conveyancing, inspections, government charges and other upfront costs to allow for.
Our home loan calculators can help you start putting some numbers around your plans.
Do first home buyers need a 20% deposit?
Not necessarily.
The amount you'll need can depend on the lender, the loan, the property and your circumstances. A smaller deposit can also affect whether lenders mortgage insurance applies.
Some eligible first home buyers may also be able to access government schemes or concessions that change the amount they need to contribute, subject to the relevant eligibility requirements.
This is an area where getting advice based on your actual numbers can be much more useful than relying on a single deposit percentage you've seen online.
Can a mortgage broker help with pre-approval?
Yes. If pre-approval is appropriate for your situation, a broker can help you understand what the lender is looking for, prepare the application and explain what the approval actually means.
Get a clearer idea of the budget you're working with before you start making offers.
Understand what financial information and documents the lender may need from you.
Potential lending considerations may be easier to deal with before you've committed to buying a particular property.
Pre-approval is generally conditional and isn't the same as unconditional approval for a particular property.
When should a first home buyer speak to a mortgage broker?
Earlier than many people think. You don't need to wait until you've found a property or you're ready to submit a loan application.
Talking to a broker earlier can help you understand what position you're in now and what may need to happen before you're ready to buy.
Start understanding your potential deposit, borrowing position and what you may need to work towards.
Work through your budget, potential repayments and whether getting pre-approval may make sense.
Work through the lending requirements and next steps for the property you're considering.
Buying your first home on the Gold Coast?
If you're planning to buy your first home on the Gold Coast, knowing how much you may be able to borrow is only one part of the picture.
Your budget also needs to line up with the types of properties and areas you're considering, while leaving room for repayments and the other costs that come with buying and owning a home.
Martin is based on the Gold Coast and works directly with first home buyers to help them understand the lending side before they commit to a property.
Want to know a little more about who you'll be dealing with? Meet Martin and learn more about The Mortgage People.
You don't need to work everything out before you ask for help
Buying your first home can feel like there's a long list of things you're supposed to understand before you even start.
That's where a mortgage broker can help. From working through your borrowing position and deposit to comparing home loan options, preparing an application and helping you navigate the process, the aim is to make the lending side easier to understand.
And you don't need to be ready to buy tomorrow. If you're still saving, starting to look or simply wondering what's realistic, that can be a perfectly useful time to have the first conversation.
You can also read more about how we help first home buyers.
Thinking about buying your first home?
You don't need to know exactly how much you can borrow or which home loan you need before getting in touch. Tell Martin where you're at, what you're hoping to achieve and what you're unsure about, and start from there.