Avoid These 7 Mistakes on Your First Home Checklist

Getting Your Deposit and Savings in Order

Your deposit isn't just the percentage you put down on the property. Lenders want to see evidence that you've genuinely saved a portion of the deposit over at least three months, and they'll also want to confirm you can cover settlement costs including legal fees, loan establishment fees, and property inspections.

Consider a buyer applying under the Australian Government 5% Deposit Scheme. They're purchasing in Joondalup, where the property price cap is $850,000 for metropolitan postcodes. They'll need genuine savings for their 5% deposit, and they'll still need separate funds set aside for settlement. If part of the deposit is a gift from family, most lenders will accept this, but they'll ask for a signed declaration from the person providing the funds confirming it's not a loan that needs to be repaid. That declaration matters because any undisclosed debt changes your borrowing capacity and can delay or derail pre-approval.

Understanding Which Government Scheme Applies to You

Western Australia offers the $10,000 First Home Owner Grant for new homes valued up to $800,000 south of the 26th parallel, which includes Joondalup. The grant doesn't apply to established homes. Stamp duty concessions under the First Home Owner Rate work differently. From May 2026, no duty is payable on homes valued up to $600,000 anywhere in Western Australia, and a concessional rate applies on homes between $600,001 and $800,000. The stamp duty concession is available on both new and established properties, but the grant is not.

If you're planning to use the Australian Government 5% Deposit Scheme, you can combine it with the state grant and stamp duty concession, but you can't combine it with Help to Buy. Help to Buy involves the government taking an equity share in your property, and it comes with income caps of $100,000 for individuals or $160,000 for couples. The 5% Deposit Scheme has no income cap, but it does require you to go through a participating lender. Not all lenders participate, so confirming your lender's involvement before you start looking at properties will save time later.

Preparing Your Home Loan Application Documents

Lenders assess your income, expenses, assets, liabilities, and credit history. For most employed buyers, that means providing recent payslips, tax returns if you've been in your role for less than two years, and bank statements covering at least three months. The statements need to show your regular income, your savings pattern, and your spending. Lenders will look at recurring expenses including rent, subscriptions, loan repayments, and buy-now-pay-later arrangements.

In our experience, buyers often overlook small liabilities that appear on their credit file but not in their everyday budget. An old interest-free purchase that's still being repaid, or a credit card with a high limit that hasn't been used in months, can reduce your borrowing capacity even if the balance is zero. Closing accounts you don't use and clearing small debts before you apply will improve your serviceability. If you're self-employed, lenders typically want two years of tax returns and business financials, and they may also request a letter from your accountant confirming your income.

Choosing Between Fixed and Variable Interest Rates

A fixed interest rate locks in your repayment amount for a set period, usually one to five years. A variable interest rate moves with the market. Some buyers split their loan, fixing part for stability and keeping part variable for flexibility. The decision depends on your circumstances, not on predicting where rates will go.

If your income is steady and your budget is tight, fixing part or all of your loan can make repayments predictable. If you expect to receive bonuses, tax refunds, or other lump sums, keeping part of the loan variable with an offset account lets you reduce the interest you're charged without penalty. Fixed loans often restrict additional repayments and may charge break costs if you refinance or sell before the fixed term ends. Variable loans usually offer redraw facilities and offset accounts, which can reduce your interest over time if you're disciplined about putting extra funds into the loan.

Factoring in Lenders Mortgage Insurance and Loan Features

If you're borrowing more than 80% of the property value, most lenders will charge Lenders Mortgage Insurance. LMI protects the lender if you default, and the premium is usually added to your loan balance. Under the Australian Government 5% Deposit Scheme, LMI is waived because Housing Australia guarantees the difference between your deposit and 20% of the property value.

Loan features matter as much as the interest rate. An offset account is a transaction account linked to your home loan. The balance in the offset account reduces the amount of interest you're charged without affecting your access to those funds. A redraw facility lets you access extra repayments you've made, but some lenders restrict redraw or charge fees. If you're planning to use the First Home Super Saver Scheme, you'll withdraw funds from your superannuation to boost your deposit. Timing that withdrawal correctly so the funds are available at settlement is part of the preparation.

Confirming Eligibility Before You Sign a Contract

Pre-approval gives you a conditional commitment from a lender based on the information you've provided. It's not a guarantee, and it's usually valid for three to six months. The property you choose still needs to meet the lender's valuation and security requirements. If you're relying on a government scheme, the property must meet the scheme's eligibility rules as well.

As an example, a buyer in Joondalup finds an established home and assumes they can access the First Home Owner Grant. The grant only applies to new homes, so they won't receive it. They can still access stamp duty relief under the First Home Owner Rate, but the $10,000 they were counting on for furniture and moving costs is no longer available. Confirming eligibility for every scheme you're planning to use, and understanding the difference between grants, stamp duty concessions, and low deposit schemes, prevents that kind of surprise after you've already committed to a purchase.

Avoiding Delays Between Pre-Approval and Settlement

Once you have pre-approval, your financial situation needs to stay stable until settlement. Taking on new debt, changing jobs, or making large purchases can affect your loan. Lenders recheck your financial position before final approval, and any material change can result in the loan being declined or the amount being reduced.

We regularly see buyers who've been pre-approved decide to finance a car or take out a personal loan before settlement. The new debt reduces their borrowing capacity, and if the property purchase depends on them borrowing the full pre-approved amount, the loan won't proceed. If you need to make a large purchase or change jobs, talk to your mortgage broker in Joondalup before you do it so the impact on your application can be assessed.

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