Understanding the Basics of First Home Buyer Mistakes

Skipping Pre-Approval and Going Straight to Auctions

Don't bid on a property without pre-approval sorted. Pre-approval tells you exactly what you can borrow and shows sellers you're a serious buyer. Walking into an auction or making an offer without it puts you behind buyers who've already done the work, and you risk missing out on a property while scrambling to get finance sorted after the fact.

Consider a bricklayer who spots a unit that suits the commute to current job sites. The auction's in two weeks. Rather than getting pre-approval first, they assume the bank will lend based on a rough online calculator figure. They bid, they win, and then the lender comes back asking for three months of bank statements, payslips, and an explanation for cash deposits from side jobs. The loan doesn't get approved in time. The deposit's gone.

Pre-approval locks in your borrowing limit before you commit to a purchase. For bricklayers working a mix of PAYG and ABN work, that matters even more. Lenders assess your income differently depending on how it's structured, and if you're earning cash on weekends or doing subbying between employee jobs, you need a broker who knows how to present tradie income to lenders. Get the pre-approval done, then go looking for properties within that range.

Ignoring Stamp Duty and Settlement Costs in Your Budget

Your deposit isn't the only upfront cost. Stamp duty, conveyancing, building and pest inspections, and lender fees all add up, and if you haven't budgeted for them, you'll be short when settlement rolls around.

In New South Wales, a first home buyer purchasing an established home valued at $750,000 pays no stamp duty under the First Home Buyers Assistance Scheme. That same buyer purchasing at $850,000 pays several thousand in duty because the exemption phases out above $800,000. In Victoria, the exemption cuts off at $600,000 for established homes, with a concession up to $750,000. In Queensland, there's no stamp duty exemption for established homes, just a reduced rate. The state you're buying in changes what you'll pay, and the type of property matters just as much as the price.

Settlement costs don't stop at stamp duty. Conveyancing generally runs between $1,200 and $2,500 depending on the state and the complexity of the contract. Building and pest inspections cost another $400 to $800 combined. If you're borrowing more than 80% of the property value, you'll also pay Lenders Mortgage Insurance, which can run into the thousands depending on your deposit size. Don't assume the bank will lend you enough to cover these costs on top of the purchase price. They won't. You need genuine savings or a clear plan to cover the gap.

Choosing the Wrong Loan Structure for Your Work Pattern

A variable rate loan with an offset account suits a bricklayer who has irregular income and wants access to extra cash when work slows down over winter. An offset account reduces the interest you pay by offsetting your savings balance against your loan balance. If you're putting aside $10,000 during busy months, that $10,000 sits in the offset and reduces the interest charged on your loan. You still have access to the cash if a job falls through or you need to cover a ute repair.

A fixed rate loan suits a bricklayer on a steady PAYG wage who wants certainty and doesn't need access to extra repayments. You lock in a rate for a set period, generally between one and five years, and your repayments don't change during that time. The trade-off is that you generally can't make large extra repayments without hitting caps, and you can't access a redraw or offset on most fixed loans. If you fix your rate and then want to refinance or pay the loan down early, you'll wear break costs.

For tradies, a split loan often makes more sense. You fix part of the loan for rate certainty and keep the rest variable with an offset for flexibility. That way, you've got a portion of your repayments locked in, but you can still throw extra cash at the variable portion when you've had a solid quarter. The structure matters more than the rate if it doesn't match how you actually earn and spend.

Not Declaring All Your Income or Debts on the Application

Lenders assess your borrowing capacity based on what you declare. If you leave out a car loan, a credit card limit, or an outstanding tool finance agreement, the lender will find it when they run a credit check. If you've understated your debts, your borrowing capacity drops. If the mistake is significant enough, the lender might decline the application outright or withdraw a pre-approval that's already been issued.

The same goes for income. If you're doing side work on an ABN and not declaring it, the lender won't count it. That might sound like it doesn't matter, but if you need that income to service the loan, the application won't stack up. If you are declaring ABN income, the lender will want tax returns, often two years' worth, and they'll assess your income based on what's been lodged with the ATO, not what you've invoiced in the last few months.

For bricklayers working PAYG with weekend cash jobs, the cleanest approach is to lodge that income through your tax return and have it assessed properly by a broker who works with tradies. Lenders won't accept cash income that isn't reported, and trying to inflate your PAYG income with under-the-table work doesn't help your application. It just makes your loan harder to place. If you're serious about buying a property, get your income structure sorted at least 12 months before you apply. If you're self-employed or working a mix of PAYG and ABN work, talk to someone who understands home loans for tradies and can show you how your income will be assessed before you apply.

Buying at the Top of Your Budget Without a Buffer

Borrowing the maximum amount the bank will lend you leaves no room for rate rises, repairs, or a slow patch of work. If your repayments are manageable now but only just, a rate rise of 0.5% could tip you into genuine financial stress.

Banks calculate your borrowing capacity using a higher interest rate than the one you'll actually pay, generally around 3% above the loan rate. That's called the serviceability buffer, and it's designed to make sure you can still afford the loan if rates go up. But just because the bank will lend you a certain amount doesn't mean you should borrow it all. If you're a bricklayer working on a labour hire contract and the builder you're working for loses the next project, your income drops. If you've borrowed to the limit, you're exposed.

A safer approach is to borrow 10% to 15% below your maximum capacity and keep a cash buffer in an offset account or a separate savings account. That buffer covers your repayments if work dries up for a few weeks, and it gives you breathing room if the hot water system fails or the ute needs $3,000 worth of work. The aim is to buy a property you can hold onto through rough patches, not one that only works if everything goes perfectly.

Overlooking the Australian Government 5% Deposit Scheme

The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with a 5% deposit without paying Lenders Mortgage Insurance. Housing Australia guarantees the difference between your deposit and 20% of the property value, which removes the LMI cost. There's no income cap, and from October 2025, there's no annual limit on the number of places available. You apply through a participating lender, not directly through Housing Australia.

The scheme has property price caps that vary by state and region. In New South Wales, the cap is $1,500,000 for Sydney and regional centres, and $800,000 for other areas. In Victoria, it's $950,000 for Melbourne and regional centres, and $650,000 elsewhere. In Queensland, the cap is $1,000,000 for Brisbane and regional centres, and $700,000 for other areas. Western Australia applies an $850,000 cap in Perth and $600,000 in the rest of the state. South Australia uses $900,000 for Adelaide and regional centres, and $500,000 elsewhere. Tasmania applies $700,000 for Hobart and regional centres, and $550,000 for other areas. The ACT has a single $1,000,000 cap, and the Northern Territory applies $750,000 in Darwin and $600,000 across the rest of the Territory.

You can combine the scheme with most state and territory first home buyer grants and stamp duty concessions, but not with Help to Buy. If you're a bricklayer who's been saving a deposit and you're close to 5%, this scheme can get you into a property sooner without the LMI clip. The catch is that you still need to service the loan, and a 5% deposit means you're borrowing 95% of the property value. Make sure the repayments work with your income before you stretch for a property at the top of the price cap.

Waiting Too Long to Get Your Paperwork in Order

Lenders want recent payslips, bank statements, tax returns if you're self-employed, and proof of your deposit. If you wait until you've found a property to start gathering documents, you'll be scrambling when the seller wants a response in 48 hours. Get your paperwork organised before you start looking, and keep it current. Payslips older than three months won't be accepted by most lenders, and if your bank statements don't cover the most recent 90 days, you'll need to request updated copies.

For bricklayers working ABN or running a small bricklaying business, lenders generally want two years of lodged tax returns and two years of financial statements. If your most recent financial year hasn't been lodged with the ATO yet, some lenders won't count that income. That can push your borrowing capacity down or delay your application by months. If you're self-employed and planning to buy in the next 12 months, lodge your tax return as soon as the financial year ends. Don't wait until October or November. The sooner it's lodged, the sooner a lender can use that income to assess your application.

If your deposit is a gift from family, the lender will want a signed declaration confirming the money doesn't need to be repaid. If you've sold tools, a car, or another asset to boost your deposit, the lender will want evidence of the sale and proof the funds have been in your account for at least three months, or a paper trail showing where the money came from. Lenders are required to verify the source of your deposit under anti-money-laundering rules, and if you can't show where the cash came from, the application stalls.

Call one of our team or book an appointment at a time that works for you. We'll go through your income, your deposit, and the loan structure that actually suits the way you work, and we'll get your application sorted before you start looking at properties.

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