So, in this week’s update, we’ll tackle the four most common questions we get from first home buyers, with clear, actionable advice you can take on board to move forward with confidence.
1. "Will my car loan actually affect my mortgage application?"
🚗 The short answer: Yes, significantly.
When a bank assesses your application, they look at your income minus all your existing debts to see what you can comfortably afford. This includes car loans, credit card limits (not just the balance), student loans, and even Afterpay or Klarna.
A simple car payment of around $320 a month could reduce your total home loan borrowing power by as much as $50,000 - $70,000.
How to manage it: Every dollar of debt counts, so the goal is to reduce it. If possible, aim to pay off your car loan before applying for a mortgage. If not, focus on making extra repayments and ensure you have a perfect six-month history of paying on time. This shows the bank you're a responsible borrower.
2. "Realistically, how long will it take to get into my own home?"
⏳ The honest answer: Longer than you probably think. Be prepared for a 6-12 month journey.
Finding and securing your first home is a marathon, not a sprint. Here’s a typical timeline from when you start getting serious:
How to stay sane (and protect your wallet): Losing out on a house hurts. Protect yourself by setting a firm maximum budget before you start looking and make your offers conditional on things like finance and a builder’s report. This experience isn't wasted - every offer you make teaches you more about the market, making you a smarter buyer for the next one.
3. "Why do I need a valuation if my deposit is less than 20%?"
🏠 The simple answer: The bank needs to protect its investment.
When you have a smaller deposit, the bank is taking on more risk. They use a registered valuation to confirm the property is actually worth what you're paying for it.
The bank will lend you money based on the lower of either the purchase price OR the registered valuation.
If the valuation comes in lower than what you agreed to pay, your effective deposit shrinks, and the bank may reduce how much they're willing to lend you.
How to handle it: This is why a "subject to finance" or "subject to valuation" clause in your offer is so important. It gives you a way out if the valuation is unexpectedly low. Having some buffer savings is also a huge advantage in this situation.
4. "Should I start cleaning up my bank statements now if I want to buy next year?"
💰 The emphatic answer: YES! Start today.
Banks will review 3-6 months of your bank statements in detail, but building strong financial habits takes time. They are looking for consistent patterns of responsible money management.
Instead of a huge to-do list, focus on these three key areas starting 6+ months before you apply:
Ready to Create Your Roadmap?
Every buyer's journey is different. If you’re ready to move from thinking to planning, the best next step is to get personalised advice.
Feel free to reach out for a no-obligation chat. Together, we can build a clear strategy to get you into your first home!