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The essential first home buyers guide

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If you are looking to buy a home in Western Australia, you may be overwhelmed by the variety of options and decisions you have to make. After all, buying your dream home is one of the biggest financial decisions that you’ll make in your life. That is exactly why our first home buyer specialists have prepared this handy first home buyers guide to arm you with all the basic information you’d like to know and answer all of your burning questions.

In this guide

  1. Steps to buying a house
  2. Government grants
  3. FAQs for first home buyers
  4. Glossary

The first home buyer’s guide to becoming a homeowner

  1. Figure out why you want to buy a home

Do you want to stop paying rent and put the money towards something you own? Would you like a home to start a family? Have you outgrown your present situation?

  1. Save for a deposit
 
You may heard people mention a 20% deposit requirement in the past. However, while this is generally a good idea, it is not always necessary. There are a few low deposit home loans available for first home buyers in WA that can help you get into your dream home sooner which we describe in this guide. So, if you are struggling to save to meet that 20% goal, it doesn’t exclude you from being able to get a home loan with your current savings.

Worried about not being able to pay your rent while you build? Worry not! Say goodbye to your landlord and say hello to homeownership sooner with our Renter’s Rescue Range. With a variety of designs and house and land packages to choose from, we’ll cover your rent while you build your dream home – at last! T&Cs apply.

  1. Work out how much you can afford to borrow

Each borrower’s situation is different, but generally, the amount you can afford to buy depends on three factors:

  • Your single or combined income
  • Your savings
  • Your credit score and credit report

If you are currently renting, try out our handy rent converter to see a list of house and land packages that you could potentially afford for the same amount as you are paying in rent.

  1. Get in touch with a professional

We’re here to guide you through every step of the process. From pre-approval to key handover and beyond, we take the stress out of the process and allow you to simply sit back and enjoy the journey.

This is especially important when it comes to finance, where we can put you in touch with expert mortgage brokers who specialise in first home buyers to find you a deal that is more suited to you than your local bank can offer.

When organising finance, be sure to:

  • Look at least two different lenders to compare rates
  • Consider help from a mortgage broker
  • Get pre-approved for your loan
 
  1. Find your dream home

Below are our top tips for narrowing down your list of options when the time comes to browse some home designs or house and land packages:

  1. Work out your must-haves and nice-to-haves

Make a list of must-haves and would like to have features for your home. You might like to have walk-in robes and a home theatre, but you must have three bedrooms and be close to public transportation.

  1. Get in touch with a first home buyer specialist

When buying a home, you’ll want to make sure that you can maintain your desired lifestyle. We can help you figure out what you can afford to pay while still living a life you love and focus on homes within that range that include your “must-haves”. Ensuring that your repayments are manageable is our top priority.

  1. Negotiate the house price

If you want to buy an established home, having the experience of a buyer advocate, real estate broker, or an experienced family member by your side during negotiations could be very beneficial. Consider if you want to buy through a private sale or an auction, and be sure to look at the contract of sale. Home and pest inspections should also be part of the negotiations as these will provide invaluable information regarding the state of the home.

When building a home, there may be a little bit of wiggle room on the price or your house, land, or both. In this case, it is also beneficial to discuss the price of the package with a trusted support present. In terms of inspections, it is worth checking whether your desired home design is on display in Perth.

  1. Make your offer

When all of the above is worked out, you can finally make your offer on your established home or chosen house and land package. If this is accepted, you can simply get in touch with your professional guide, mortgage broker, or lender to organise the paperwork.

  1. Settle on your home

Settlement is the date when the property officially becomes yours. The next matter is your stamp duty, which is a government property transfer tax. You have 30 days to pay your stamp duty after settling. However, as a first home buyer in WA, you are exempt from paying stamp duty if:

  • Your home costs less than $430,000
  • Your land costs less than $300,000 (if buying vacant land)
  • You are using the First Home Guarantee
  • You use a Keystart home loan

Once you’re in, you’re in. You can enjoy your new lifestyle and all of the fantastic benefits that come with being a homeowner.

Please note: If at any time your home loan becomes less manageable or a better option becomes available, you can get in touch with us to find a suitable refinance solution.

What government grants are available?

First Home Owners Grant (FHOG)

This grant assists buyers who are purchasing or building a brand-new home by providing a one-off payment of $10,000 to eligible borrowers in WA. This does not apply for renovations or the purchase of older homes, and there are restrictions in terms of the maximum purchase price. To simplify the requirements, we have provided an easy-to understand outline of the eligibility criteria.

First Home Guarantee (FHBG)

This government incentive assists first-time home buyers in purchasing a home with a deposit as low as five per cent. Additionally, eligible buyers will not need to pay Lenders’ Mortgage Insurance (LMI).

Family Home Guarantee (FHG)

The Family Home Guarantee can be used by first-time home buyers or those who have previously owned a home to build or buy an existing home. With the FHG, your deposit can be as low as two per cent. However, the FHG cannot be used to buy an investment property. For more information on purchasing for investment, check out the investment property guide by R&W Investment Sales.

First Home Super Saver Scheme (FHSS)

The First Home Super Saver (FHSS) scheme permits voluntary contributions from your superannuation to go towards the deposit on your first home, which can be helpful for those looking to put together a deposit.

Join the first home buyers club

There’s a reason we’re the specialists for first home buyers WA has been talking about.

We allow you to forget about the hassle and enjoy the transition into homeownership – at last! 

With an array of home design options (including our renter’s rescue series), house and land packages in Perth, and access to a team of first home buyer home loan specialists, we are your one-stop-shop for everything you’ll need along the road.

Whether you’re building your home or buying an established home, our first home builders in Perth here to provide the guidance and assistance you need for a stress-free journey.

So, why wait any longer? Get in touch with your first home buyer guide today!

Frequently asked questions

What are interest rates

Interest rates are the fees lenders charge for allowing you to borrow money. These are conveyed as a percentage of the amount borrowed, and are informed by the cash rate set by the Reserve Bank of Australia.

How much can be borrowed?  

For an estimate of the amount, you could borrow for your first home, use our borrowing capacity calculator.

What is a guarantor home loan? 

A guarantor home loan uses your guarantor’s property (usually parents or grandparents) as collateral instead of a deposit. The loan works by securing 80% of the loan amount on the property you are buying and the other 20% on your guarantor’s property. It is the only way to borrow between 100% and 110% of a property’s purchase price.

What is stamp duty?  

Stamp duty, also called transfer duty, is a fee the government charges for transferring ownership to those who purchase land, property, or some other assets. The money generated by stamp duty is returned to the economy by funding public sectors. The amount you must pay is based on the price bracket of your home. Occasionally, depending on the value of your property, your stamp duty could be discounted or even completely waived.

How much should be saved for a deposit? 

Ideally, lenders would like borrowers to have 20% of the home’s purchase price saved as a downpayment. So, if the house you plan to buy is $800,000, you need a deposit of $160,000.

The amount is often out of reach for buyers, especially for first-time buyers. In this case, a lender may offer the option of paying the Lender’s Mortgage Insurance in exchange for accepting a smaller downpayment.

What documents do lenders need?

This includes identification documents so your lender can verify your identity, income documents to show you have enough income to repay the loan, information about your assets and liabilities, including savings, existing loans, credit cards and investments, and property details, including an address and a contract of sale.

What are supporting documents? 

If you buy a house with a guarantor, a lender will want to see their financial documents. These are any documents that provide evidence relating to assets and liabilities, credit cards, loans, and account statements. If you are using a builder broker, they can run through all of the requirements for you and help you with the paperwork.

Glossary

LMI: Lenders Mortgage Insurance benefits the lenders because it works like insurance against your defaulting on the loan

LVR: Loan to Value Ratio- Your LVR is how lenders assess the risk of the loan. The value of your property is compared to how much money is being borrowed. The lower your LVR percentage, the less of a risk that loan is to a lender. Getting a 20% deposit leads to an excellent loan-to-value ratio for many lenders.

Equity: The difference between the value of an asset and how much money you owe on it

Comparison rate: This rate simplifies figures and allows you to determine the cost of several financing choices.

Principal and interest: These are two parts of your home loan. The principal is the amount you have borrowed, and the interest is the amount you pay for the loan over time.

Conditional approval: Is a stage in the loan approval process where a lender has reviewed your financial situation and ability to service the loan.

Pre-approval: This means a lender has, in principle, agreed to lend you a certain amount of money to purchase your home. However, the loan has not reached final approval.

Conveyancing: The legal term for passing ownership of a property from one person to another.

Deposit: Also called a downpayment, a deposit is the amount of money you initially contribute to the purchase of your home.

Offset sub-account: This account is linked to your home loan, where you can put money and use it to lower the interest payments on your home loan.

Jack Thornton

Jack Thornton

Founder & Director

With over six years dedicated to assisting first-time homebuyers in navigating house and land packages, my expertise is deeply rooted in the Perth property market. I specialise in providing tailored financial solutions and insightful market analysis, ensuring first home buyers make informed decisions.

Disclaimer

Prepared by Uprise Group Pty Ltd (ABN 32 627 884 477). This information does not take into account your personal objectives, circumstances, or needs. Consider reading the disclosure documents for any products and services before making a decision, and seek independent legal, financial, taxation, or other advice to address your particular circumstances.