Buying a home is an exciting milestone, but the process can feel overwhelming if you're not sure what to expect. From preparing your finances and securing pre-approval to making an offer, settling, and moving in, this guide outlines the key steps to help you navigate your home buying journey with confidence.
Prepare and understand your finances
Find out how much you can borrow
You can use one of Unity Bank’s calculators found here.
Work out how much you can put down as a deposit
You’ll typically be required to have a minimum 20% deposit of the purchase price of the home. The larger your deposit, the smaller your home loan will be and the less interest you will pay over the long run. For deposits less than 20%, you’ll incur Lenders’ Mortgage Insurance (LMI), which can generally form part of the overall loan.
Appreciate all other costs involved
Apart from establishing a home loan and paying regular interest, other supplementary costs are involved when buying a home. Some of these extra costs may include stamp duty, LMI, insurance premiums, legal and conveyancing fees, agent fees, valuation fees and even pest control expenses.
Explore any government grants / schemes / concessions that you might be eligible for
You may be able to save money and buy a home sooner than expected with assistance from the government. In particular, many government programs are developed with the aim of helping first home buyers. These may reduce costs or boost your deposit. Unity Bank is a proud supporter and participant of many of these grants / schemes / concessions, including:
- Australian Government 5% Deposit Scheme
- First Home Owner Grant
- First Home Super Saver Scheme
- Queensland’s Boost to Buy Shared Equity Scheme
- State-based stamp duty concessions for first home buyers
Set up a budget / Save for a deposit
It is wise to start making a budget early, and build your deposit regularly over time. This may mean you will have to make some lifestyle changes. Unity Bank’s Budget Planner Calculator may help with this.
Do your research & apply for conditional home loan pre-approval
You need to become familiar with the various features, costs and conditions of home loans.
Some important home loan characteristics include:
- The interest rate and how it is calculated
- Whether you’d like to make loan repayments monthly, fortnightly or weekly
- The difference between fixed rate and variable rate loans
- Loan attributes such as extra repayment limits, splits, redraw and offset facilities
- Any upfront or ongoing loan fees, such as strata or council rates
Find out your creditworthiness
Before you are approved for a home loan, banks typically assess your repayment capabilities, i.e. serviceability. They do this by reviewing your income, expenses, assets and liabilities. It's a way for lenders to determine if you're able to manage ongoing repayments and pay back what you have borrowed.
Apply for a conditional pre-approval
If all goes well, banks can then give you a conditional pre-approval (or approval in principle) so that you can attend auctions / make purchase offers with greater peace of mind. This is basically an estimate of how much money you can borrow from your lender.
Attend inspections and discover your future home
Write down the ideal suburbs where you would like to live
Liveability means different things to different people. Some factors to consider include:
- Schools and hospitals
- Public transport and parking
- Cafes, shops and local restaurants
- Green space and parks
- Noise levels and proximity to roads
- Flood-prone areas and bushfire-prone land
- Neighbourhood culture and upcoming developments
Understand what type of property you are looking for
Many property types are available including houses, townhouses, villas and apartments. You can also buy new, established or off the plan. Other aspects you might consider are what number of rooms you would like, if a backyard essential, what the natural lighting is like, are there large trees nearby, and what is the property orientation.
Leverage property platforms
Online property websites such as realestate.com.au and domain.com.au are valuable tools that provide insight into property trends, recent sales and comparable properties currently on the market.
Attend property inspections / open homes
By attending different homes, you will gradually get an understanding of what you like and don’t like, and also what the market pricing is. Also check online listings regularly and engage with real estate agents.
Make an offer
Review the contract of sale, then make an offer
After reviewing the necessary documentation (preferably with your solicitor or conveyancer), make your offer to the seller.
Success! Now settlement starts
Sign and date the contract of sale and pay the deposit (usually 10% of the property price). Settlement begins after the contract is signed, and can generally take up to 90 days. Settlement refers to the legal procedures where property ownership is transferred to you (the buyer), and the remaining purchase price is paid. During this period, you will need to apply to have your conditionally pre-approved loan formally changed to an ‘unconditional approval’. This may involve the bank requiring more documentation from you, and a property valuation taking place.
Conduct a final inspection
Remember to complete a final inspection just before settlement. This ensures that the property is in good condition. For example, you may check:
- Heating, cooling and hot water are functioning
- Everything electrical and plumbing-related is in working order
- Fixtures, lighting and surfaces are undamaged
- Any agreed repairs have been completed
- Rubbish has been taken away, and there are no pest infestations
You may hire a professional defect / building inspector if desired.
Protect your new home
We’re only human, and the unexpected can always happen in life. Cover yourself against potential risks by arranging any insurance products such as home and contents insurance from the purchase date.
Time to settle, and then move in
Provide the remaining funds to complete the purchase, and pick up the keys
Congratulations, you are now a homeowner!
Meet with one of our Unity Bank home loan experts
Buying a home can be an overwhelming experience, but help is always available.
Click here to speak to one of our home loan specialists at Unity Bank at any time – whether online, over the phone or in person.
