12 Common First Home Buyer Questions Answered Simply
Buying your first home can feel like stepping into a world of real estate terms, finance forms, and confusing costs. But here’s the truth: you’re not alone, and most people feel exactly the same way when they begin the journey.
It’s totally normal to have a million questions bouncing around your head. To make it all easier, we’ve rounded up 12 of the most common home-buying questions first-time buyers ask. These are the ones almost everyone struggles with at some point, and we’re here to break them down in plain English.
In this guide, you’ll find easy-to-understand answers to help you move forward with confidence, whether you’re dreaming about your first open home or deep in house-hunting mode.
First-home buyer questions? We’ve got the answers. From LMI to interest rates, our friendly team helps first-time buyers get clarity and confidence through the entire home loan journey. Call your local expert
Sydney mortgage brokers at
0403 316 686 to get started.
1. How much can I afford to spend on a house?
The amount you can borrow depends on several factors: your income, monthly living expenses, debts, and the size of your deposit all play a part. Lenders assess your financial situation to decide how much they’ll lend you, and they’ll also look at your credit score and job stability.
Using a mortgage calculator or an EMI calculator online can help you get a rough idea. But for personalised advice, it’s worth speaking to a mortgage broker who can explain your exact borrowing capacity.
A simple rule many home buyers follow is the “30% rule”, where no more than 30% of your income goes towards your mortgage repayments. While it’s not a hard rule, it helps keep your budget in check, especially when property prices and interest rates rise.
It’s also wise to factor in other expenses, such as council rates, utilities, and building insurance, which all contribute to the overall cost of owning a home.
2. What is a mortgage, and how does it work?
A mortgage is a home loan you take out to buy a property, and it’s repaid over time with added interest. The repayment covers the principal, which is the original loan amount, and the interest charged by the lender.
Most home loans in Australia are structured over 25 to 30 years. You’ll choose between a fixed interest rate, where your repayments stay the same for a set period, or a variable rate that can go up or down with market changes. Some people even split their loan between both.
The key thing is to understand how your interest rate affects your monthly repayments and the total amount you'll repay over the life of the loan. This is why choosing the right mortgage structure from the outset is crucial.
3. How much deposit do I need for my first home?
The house deposit required typically ranges from 5% to 20% of the property’s purchase price. If you’ve saved less than 20%, most lenders will require you to pay Lenders Mortgage Insurance (LMI), which protects them if you can’t repay the loan.
The good news is that there are several government schemes designed to help first-time home buyers get into the market sooner.
The First Home Loan Deposit Scheme (now called the First Home Guarantee) allows eligible buyers to purchase with just a 5% deposit and no LMI.
There’s also the Family Home Guarantee for single parents, which allows entry with a 2% deposit.
You may also be eligible for a First Home Owner Grant or state-based programs like the NSW First Home Buyer Assistance Scheme. These can give your savings a boost or reduce the amount of deposit you need.
4. What is pre-approval, and why do I need it?
Pre-approval is a lender’s conditional agreement to lend you a certain amount based on your financial situation. It’s not a guarantee, but it shows you’re serious and gives you a clear spending limit when house hunting.
With pre-approval, you can confidently make offers knowing you’re shopping within your budget. Sellers and real estate agents take you more seriously when they know you’ve got pre-approval sorted.
Pre-approval usually lasts for about three to six months and helps you avoid disappointment later. Just keep in mind that final or unconditional approval still needs to happen after your offer is accepted and all checks are completed.
5. What costs should I expect besides the deposit?
When buying a house, your deposit is only part of the picture. There are several other costs to factor in, and they can add up quickly if you’re not prepared. Stamp duty is often the biggest one and varies depending on the state and property value.
Additionally, there are legal and conveyancing fees, mortgage application fees, and transfer fees for mortgage registration. Most mortgage brokers don’t charge you a fee, since the lender typically pays them.
You'll also need to budget for building and pest inspections, moving expenses, and connection fees for utilities. Some buyers choose to obtain title insurance or hire a buyer’s advocate for additional assistance.
And don’t forget about the little things, such as boxes, cleaning, or last-minute repairs. Having a buffer in your savings can make these unexpected costs less stressful.
6. Should I buy an existing home or build new?
Both options have pros and cons, and the right choice depends on your priorities. Buying an existing home usually means a quicker move-in and access to established suburbs with better infrastructure. You can see exactly what you're buying and settle quickly.
On the other hand, building new gives you a brand-new space tailored to your taste and lifestyle. It also comes with fewer repairs and lower maintenance early on. You may be eligible for incentives such as the First Home Owner Grant when building a new home.
However, keep in mind that construction can take time, and costs may increase if there are delays. Consider your timeline, location preferences, and whether you’re prepared for the building process.
Buying your first home in the Northern Beaches or North Sydney? Our
Sydney mortgage brokers specialise in guiding first-time buyers through the full home loan application—from pre-approval to settlement. Call us today at
0403 316 686 to get started.
7. How do I choose the right suburb or area?
Choosing the right suburb is just as important as picking the right house. Consider the local schools, transportation options, access to shops and parks, and safety levels. Think about your daily commute, lifestyle, and whether the area has long-term capital growth potential.
Use websites and house-searching portals to compare suburbs. Examine trends in property prices and assess the supply of properties available within your price range. Visit the area at different times of the day and talk to locals to get a sense of the vibe.
Also, check if the area falls under planning restrictions like land subject to an inundation overlay, which could affect future value.
To help guide you with your search around New South Wales, here are some of our articles on the top suburbs:
Best Suburbs in Sydney for Families
Most Expensive Suburbs in Sydney
Cheapest Suburbs to Rent in Sydney
North Sydney Suburbs for First-Time Property Investors
Best Northern Beaches Suburbs for First Home Buyers
8. What should I look for at open homes or inspections?
When inspecting a property, look beyond the surface. Check for signs of structural damage, such as cracks in the walls, uneven floors, or doors that don’t close properly. Look for signs of mould or water leaks under sinks and around ceilings.
Don’t be shy about testing taps, lights, and windows. A thorough building and pest inspection from a qualified inspector is always worth the cost; it can save you thousands in the long run.
Bring a checklist to stay organised, or request a home inspection report if one is available. Smells, sounds, and even lighting can tell you a lot about how a home has been maintained.
9. How do I make an offer on a house?
Making an offer begins with determining the property’s value and your financial capabilities. If it’s a private sale, you’ll usually submit an offer in writing. Auctions are different; you’ll need to be ready with finances, as they’re unconditional.
Always read the contract and include necessary conditions, such as 'subject to finance' or 'subject to building and pest inspection'. Negotiating the price is common in private sales, so be firm with your maximum budget.
A mortgage broker, solicitor, or real estate lawyer can help you navigate the process and make sure everything is in order before you commit.
10. What happens after my offer is accepted?
Once your offer is accepted, you’ll sign the contract and pay a holding deposit. A cooling-off period may apply, depending on your state, allowing you to withdraw if needed. Then, you’ll organise your building and pest inspections if they haven’t already been done.
Your lender will do a final review of your documents before issuing unconditional approval. Once that’s sorted, you’ll work with your solicitor to prepare for settlement.
On the settlement date, your funds are transferred, legal documents are finalised, and the property becomes officially yours. This part of the home-buying process typically takes 30 to 90 days from offer to settlement.
11. Am I ready to buy a house?
Being ready to buy a home isn’t just about having a deposit. It’s about understanding your financial situation, having a stable income, manageable debt, and knowing what long-term commitment you’re making.
You should also consider your lifestyle. Are you planning to stay in one place for several years? Do you have job security and a clear idea of future plans?
Emotional readiness matters just as much as financial stability. If you’re unsure, consulting a mortgage broker or financial advisor can provide guidance. Joint ownership with a partner or family member might also be an option if affordability is a concern.
12. What are the steps in the home-buying process?
Buying a home for the first time might seem complex, but breaking it into steps makes it much easier to manage. Here’s a simple breakdown of the key stages most home buyers go through:
- Save for a Deposit – Build your savings with a target of at least 5%–20% of the property’s purchase price.
- Check Your Borrowing Capacity – Use mortgage calculators or speak with a broker to see how much you can borrow.
- Get Pre-Approval – Apply with a lender for conditional approval to guide your property search.
- Start House Hunting – Explore suburbs, visit open homes, and research property values and local markets.
- Make an Offer – Submit an offer or prepare for auction, depending on the sale type.
- Sign the Contract – Review it with a solicitor or conveyancer and ensure key conditions are included.
- Organise Inspections – Book a building and pest inspection to check for structural damage or hidden issues.
- Get Unconditional Approval – Finalise your home loan once all checks are complete and accepted.
- Prepare for Settlement – Your solicitor coordinates with the lender and seller’s team to transfer ownership.
- Settlement Day – Funds are transferred, documents finalised, and you officially become the property owner.
First-time home buyer? We’ll guide you through the entire loan process—from paperwork to approval. Our Sydney mortgage brokers are here to answer all your loan-related questions and help you avoid delays. Call us now at 0403 316 686 and book a free chat with our expert brokers.
Final Thoughts: You’ve Got This
Buying your first home is a big milestone. While the home-buying process can seem overwhelming at times, understanding these key steps and asking the right home-buying questions will make the journey smoother and more rewarding.
Whether you're buying a house in North Sydney or exploring the Northern Beaches, it helps to have the right support by your side.
If you’re unsure where to start or just want expert guidance tailored to your financial situation, the team at Mortgage Brokers Northern Beaches is here to help. We’re based in North Sydney and proudly assist first-time home buyers across the Northern Beaches and the whole Sydney region.
Ready to take the next step? Give us a call today at
0403 316 686 for a friendly, obligation-free chat.
