Why should tradies prepare early for property purchases?

Buying your first home as a tradie can feel overwhelming, but with proper preparation, you'll be holding those keys sooner than you think. The property market rewards those who come prepared, and understanding the application process early puts you ahead of the pack.

Understanding Your Financial Situation

Before you start browsing properties, you need a clear picture of where you stand financially. Your financial situation determines everything from your borrowing capacity to the loan amount you can access. As a tradie, your income structure might include:

• Base wages plus overtime
• Subcontractor payments
• Tool allowances and vehicle benefits
• Penalty rates for weekend or night work

Lenders want to see consistent income, so gather your bank statements, tax returns, and payslips from the last three months. If you're a subcontractor, having two years of tax returns helps demonstrate steady earnings.

Getting Pre-Approved Makes All the Difference

When you get pre-approved for your first Home Loan, you'll know exactly what loan amount you can borrow. This knowledge transforms you from a browser into a serious buyer. The pre-approval process involves:

1. Submitting your financial documents
2. Having your borrowing capacity assessed
3. Receiving confirmation of your approved loan amount
4. Understanding your interest rate and loan terms

With pre-approval in hand, real estate agents take you seriously, and you can move quickly when you find the right property.

Home Loan Options and Interest Rates

You'll have access Home Loan options from banks and lenders across Australia, each offering different packages and benefits. The main types include:

Variable Interest Rate Loans: Your interest rate can go up or down with market conditions. These often come with features like offset accounts and the ability to make extra repayments.

Fixed Interest Rate Loans: Your interest rate stays the same for a set period, usually 1-5 years. This gives you certainty about your repayments but less flexibility.

Split Loans: Part variable, part fixed, giving you some certainty while maintaining flexibility.

Many lenders offer interest rate discounts for tradies, especially if you have a steady employment history or work for established companies.

First Time Home Buyer Benefits

As a first-time buyer, you can access several first time home buyer programs and first time home buyer schemes:

First Home Owner Grants (FHOG): State governments offer these grants, typically ranging from $10,000 to $25,000, depending on your location and the property type.

Home Guarantee Scheme: This government initiative helps you buy with as little as 5% deposit, avoiding lenders mortgage insurance (LMI).

Stamp Duty Concessions: Many states offer reduced or waived stamp duty for first-time buyers, potentially saving you thousands.

Understanding Loan to Value Ratio (LVR)

Your loan to value ratio (LVR) is crucial when applying for a home loan. It's the percentage of the property's value you're borrowing. For example:

• Property value: $600,000
• Your deposit: $120,000 (20%)
• Loan amount: $480,000
• LVR: 80%

If your LVR exceeds 80%, you'll typically need to pay lenders mortgage insurance (LMI). However, some first-time buyer schemes can help you avoid this additional cost.

The Streamlined Application Process

Working with a mortgage broker who understands tradies means access to banks and lenders nationwide through a streamlined application process. Instead of approaching each lender individually, your broker can:

• Compare loan products across multiple lenders
• Present your application in the most favourable light
• Handle the paperwork and communication
• Negotiate better terms on your behalf

Planning for Additional Costs

Beyond your deposit, budget for these additional costs when buying a home:

• Stamp duty (unless you qualify for exemptions)
• Building and pest inspections
• Conveyancing fees
• Mortgage registration fees
• Home insurance
• Moving costs

Typically, budget an additional 3-5% of the purchase price for these expenses.

Investment Opportunities Down the Track

Once you've secured your first home, many tradies consider investment loan options for their first investment property. Understanding investment loan applications early can help you plan your property portfolio. The skills you develop during your first home purchase - understanding the application process, maintaining good bank statements, and building relationships with lenders - will serve you well for future investment loan applications.

Starting your property journey with proper preparation sets the foundation for long-term wealth building. Take the time to understand your options, gather your documents, and get pre-approved. Your future self will thank you for the effort you put in now.

Call one of our team or book an appointment at a time that works for you. We specialise in helping tradies secure their first home and understand exactly what lenders are looking for.