Buying your first home as a builder might seem straightforward – after all, you know construction inside and out. But the financial side of buying a home involves a different set of processes and timelines that can catch even experienced tradies off guard.
Understanding the home buying timeline helps you plan your finances, take advantage of first time home buyer schemes, and avoid costly delays. Let's walk through each stage of the process and what you can expect along the way.
Getting Your Financial Situation in Order (2-4 weeks)
Before you start looking at properties, you need to understand your borrowing capacity. This involves:
• Gathering your bank statements from the past three months
• Calculating your income, including any irregular contractor payments
• Listing your assets and debts
• Understanding how much you can borrow based on your financial situation
As a builder, your income might vary throughout the year. Lenders will want to see consistent earnings, so having solid bank statements and tax returns is crucial. Many builders benefit from working with mortgage brokers who have access to banks and lenders nationwide and understand the trades industry.
Research First Time Home Buyer Programs (1-2 weeks)
Australia offers several first time home buyer programs that can reduce your upfront costs:
• First Home Owner Grants (FHOG): Each state offers different grant amounts
• Home Guarantee Scheme: Allows eligible buyers to purchase with as little as 5% deposit
• Stamp duty concessions: Most states offer reductions for first home buyers
These programs can save you thousands of dollars, but they come with eligibility criteria and property price caps. Research what's available in your state and how they might affect your loan amount and overall costs.
Get Pre-Approved for Your Home Loan (2-4 weeks)
Getting pre-approved gives you a clear understanding of:
• Your maximum loan amount
• Whether you'll need lenders mortgage insurance (LMI)
• Your loan to value ratio (LVR)
• Potential interest rate discounts
• The difference between variable interest rate and fixed interest rate options
The application process typically involves submitting bank statements, payslips, tax returns, and details about your assets and liabilities. For builders, this process might take longer as lenders assess irregular income patterns.
Ready to get started?
Book a chat with a Finance & Mortgage Brokers at Tradie Home Loans today.
Property Search and Making an Offer (4-12 weeks)
With pre-approval in hand, you can confidently search the property market. This timeline varies greatly depending on:
• Property availability in your preferred area
• Your specific requirements
• Market conditions
• Competition from other buyers
When you find the right property, you'll need to make an offer. In most states, this involves signing a contract with a cooling-off period, though this varies by location.
Formal Loan Application and Approval (2-6 weeks)
Once your offer is accepted, you'll need to apply for a home loan formally. This involves:
• Submitting updated financial documents
• Property valuation by the lender
• Detailed assessment of your borrowing capacity
• Final approval from the lender
During this stage, lenders will verify all information and ensure the property value supports the loan amount. They'll also finalise details like whether you want an offset account and confirm your interest rate.
Settlement and Moving In (4-8 weeks)
The settlement period is typically 30-60 days from when contracts are signed. During this time:
• Building and pest inspections are completed
• Your solicitor or conveyancer handles legal requirements
• Final loan documents are prepared
• Settlement occurs and keys are handed over
This period allows time for any final checks and ensures all legal and financial requirements are met.
Tips for Builders Buying Their First Home
Document Everything: Keep detailed records of your income, especially if you work as a contractor. This makes the loan application process smoother.
Consider Your Work Location: If you work on different sites, factor in travel time and costs when choosing a location.
Think About Investment Opportunities: Some builders purchase their first home with an eye toward investment loan options later. Consider properties with development potential or in growth areas.
Understand the Costs: Beyond the deposit, factor in stamp duty, legal fees, inspection costs, and moving expenses.
Access Multiple Lenders: Working with brokers who have access to Home Loan options from banks and lenders across Australia can help you find packages that suit your specific situation.
Planning Your Timeline
The entire process typically takes 3-6 months from start to finish, but this can vary based on your circumstances and market conditions. Starting early gives you more options and reduces pressure.
For first investment property purchases later in your career, many of these same principles apply, though investment loan applications have different criteria and documentation requirements.
Remember, each person's financial situation is unique, and there's no one-size-fits-all approach. The benefits of understanding this timeline include better planning, reduced costs, and more confidence throughout the process.
Whether you're looking at variable interest rates, fixed rates, or a combination, having a clear timeline helps you make informed decisions about when to lock in rates and how to structure your loan.
The streamlined application process available through experienced mortgage brokers can help reduce some of these timeframes, particularly for builders who understand the value of working with industry specialists.
Call one of our team or book an appointment at a time that works for you. We understand the trades industry and can help you access the right loan options for your situation.
