Navigating your first home purchase: a 25-year-old’s guide to getting it done

Entering the property market as a first-time buyer feels like stepping into a maze.

Interest rates are sky-high, homes are less affordable than ever, and there’s a never-ending stream of jargon that just adds to the confusion. Believe me, I get it. I’m 25, and I’ve recently been through it myself. But I made it through—and now I want to help you do the same.

If you’re a young, aspiring first-home buyer, here’s what you need to know:

LVR (loan-to-value ratio)

LVR is a fancy way of saying how big your loan is compared to the price of the property. It’s expressed as a percentage, and the higher it is, the more risk the bank takes on. So, if you’re borrowing 90 per cent of the purchase price, your LVR is 90 per cent.

LMI (Lenders Mortgage Insurance)

If your LVR is over 80 per cent, your bank will ask you to pay LMI, which covers them if you can’t repay your loan. While it’s an extra cost you’d probably rather avoid, LMI can also be your ticket into the market sooner rather than later.

First home buyer guarantee

One of the perks of being a first-home buyer is the government might cover your LMI, saving you thousands in upfront costs. It’s a game-changer.

Stamp duty concession

Stamp duty is a tax you pay on top of the purchase price of your property. It can be around 5 pet cent of the property price—a hefty chunk of change. But, first-home buyers can often get a concession or even avoid paying it entirely, depending on where you live and how much your home costs.

FOMO (fear of missing out)

We all know what FOMO is, especially when it comes to real estate. The fear of missing out can make you feel like you need to jump in before you’re ready. But remember, buying a home is a big deal, so take your time and make sure you’re prepared.

Building your A-team

When you’re ready to start thinking seriously about buying your first home, there are three key people you need to chat with:

Coffee one: the mortgage broker

Start by finding a mortgage broker – ask friends or family for recommendations. A 30-minute coffee with a broker will give you more practical financial knowledge than you ever got in school. They’ll walk you through the steps and help you understand what buying your first home might look like.

Coffee two: the conveyancer

Your conveyancer is the one who makes sure the property you’re eyeing is legit. They’ll review the contract before you sign and ensure there aren’t any hidden surprises that could cause trouble down the road.

Coffee three: your mentor

Finally, have a coffee with someone who’s been there and done that. Whether it’s your parents, a trusted relative, or a friend who’s already taken the plunge, find someone who can offer guidance and keep you motivated.

Let’s chat

If you’re keen to learn more, Tribe Financial are hosting a First Home Buyer night on October 17 in Torquay. We’ll dive into these topics and more, helping you feel confident about taking the next steps.

Shoot us an email at [email protected] to get on the list.

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