Buying your first home in Newcastle

Most first home buyers who ring us are not confused about what they want. They are confused about what is actually possible on their income and their deposit, and about which trade-off they are making without realising it. This guide covers the parts that come up in almost every first appointment.

How big does the deposit actually need to be

Twenty per cent of the purchase price is the cleanest path, because it avoids lenders mortgage insurance entirely. It is not, however, a rule, and plenty of people we see get in with less. The real question is which of three routes you take to cover the gap, because each one costs you differently over the life of the loan.

• Pay lenders mortgage insurance, a one-off premium added to the loan, in exchange for a smaller deposit now
• Use a guarantor, usually a parent, who puts up equity in their own property rather than handing over cash
• Use a federal scheme place if you are eligible, which can reduce or remove the insurance cost for a limited number of places each year

The New South Wales concessions

First home buyers in New South Wales can access duty concessions and, for some price points, a full exemption, along with grant eligibility on a new build. The thresholds and the exact treatment move with policy, and we check your eligibility against the current settings at your first appointment rather than quoting a figure that may already be out of date by the time you read this. What does not change is that the concession is applied at settlement, so it needs to be factored into your deposit and cost planning from day one, not discovered on the day.

Guarantor loans, properly

A guarantor arrangement lets a parent or family member offer equity in their own home as additional security, which can remove or reduce the need for lenders mortgage insurance. It is a serious commitment for them, not a formality, because their property is genuinely on the line if the loan is not paid. We insist that any guarantor gets their own independent legal advice before anything is signed, and most lenders require it as a condition of the loan regardless.

• The guarantor is not on the title and does not own any share of the property
• Most guarantor arrangements can be released once enough of the loan is paid down or the property has grown enough in value
• A guarantor should read the loan documents themselves, not take your summary of them

What older Newcastle stock does to a valuation

A first purchase around here often means older brick or weatherboard stock in suburbs like Adamstown, Lambton or Cardiff, and that comes with its own valuation and building report questions. Lenders will sometimes value conservatively on a property that needs obvious work, and a building and pest report that turns up asbestos, an ageing roof or an underquoted electrical system can change the numbers after you have already had an offer accepted.

Our advice on this is simple: get the building report organised as early as the contract allows, not at the last possible moment, so a problem shows up while you can still walk away or renegotiate rather than after you are committed.

What to bring to the first appointment

• Recent pay slips, for both of you if you are buying together
• Three months of bank and credit card statements
• Photo identification
• A rough idea of what you already owe, including any buy now pay later balances

This is general information for Newcastle and Lake Macquarie buyers, not advice about your situation. Concession thresholds, scheme places and lender policy all move. The first appointment is free and is the right place to check any of this against your own numbers.