Plumber's Guide to Buying Your First Terrace House

As a plumber, you've probably worked on plenty of terrace houses throughout your career. You know their quirks, their charm, and their potential. Now you're thinking about buying your first home – and a terrace house might just be the perfect choice.

Terrace houses offer character, location benefits, and often represent solid value in the property market. But when it comes to applying for a home loan as a tradie, there are specific considerations you need to keep in mind.

Understanding Your Financial Situation as a Tradie

Before you start looking at that dream terrace house, you'll need to get a clear picture of your financial situation. As a plumber, your income might fluctuate between busy and quieter periods, which lenders will examine closely.

Your borrowing capacity depends on several factors:

• Your average annual income over the past two years
• Your existing debts and expenses
• Your deposit amount
• The loan to value ratio (LVR) you're comfortable with

Most lenders will want to see bank statements covering at least three to six months, plus tax returns and possibly a letter from your accountant confirming your income.

First Time Home Buyer Programs That Work for You

The good news is there are several first time home buyer schemes designed to help tradies like yourself get into the property market. These programs can significantly reduce the upfront costs of buying your first home.

Key programs include:

1. Home Guarantee Scheme: This allows eligible first home buyers to purchase with as little as 5% deposit without paying lenders mortgage insurance (LMI)

2. First Home Owner Grants (FHOG): Each state offers different grant amounts and eligibility criteria

3. Stamp duty concessions: Many states provide stamp duty reductions or exemptions for first home buyers

Choosing Between Fixed and Variable Interest Rates

When securing your first home loan, you'll need to decide between fixed interest rate and variable interest rate options, or perhaps a combination of both.

Variable rates typically start lower and can decrease if the Reserve Bank cuts rates. However, they can also increase. Fixed rates provide certainty over your repayment amount for a set period, which can help with budgeting – particularly useful when your plumbing income varies seasonally.

Many first time home buyers choose to fix a portion of their loan amount while keeping some on variable rates. This approach provides both stability and flexibility.

The Benefits of Professional Mortgage Broking

Working with a mortgage broker who understands the trades industry can make a significant difference to your application process. Rather than approaching banks individually, a broker provides access to banks and lenders nationwide, helping you compare different packages and find suitable options.

A broker familiar with tradies can:

• Explain how different lenders assess self-employed income
• Help structure your investment loan application if you're considering the property as an investment
• Access interest rate discounts that might not be publicly advertised
• Guide you through the streamlined application process

Maximising Your Home Loan Features

Once you get pre-approved for your first home loan, consider what additional features might benefit your situation. An offset account can be particularly valuable for tradies, as you can park money from big jobs to reduce interest payments while maintaining access to your funds.

If you're thinking long-term, discuss investment loan options with your broker. Your first terrace house might become an investment property down the track, so understanding how this affects your loan structure is important.

Taking the Next Step

Buying your first home as a plumber doesn't have to be overwhelming. With access to home loan options from banks and lenders across Australia, plus government schemes specifically designed to help first home buyers, that terrace house could be within reach sooner than you think.

The application process starts with understanding your borrowing capacity and getting your financial documents in order. From there, exploring different first time home buyer programs and loan structures will help you find the right fit for your circumstances.

Call one of our team or book an appointment at a time that works for you. We specialise in helping tradies access the right home loan solutions and can guide you through every step of buying your first terrace house.