The ultimate guide to buying a house in Australia

Buying a house in Australia can be an exciting – if expensive – step to take, especially if you’re a single parent. Having your own home offers stability for you and your family. But you’ll want to ensure you’re putting yourself in the best possible position to buy a property you can afford to pay off.

Whether you are buying your first home or just want to upgrade, this guide offers the best tips and information on buying a property Down Under.

How to buy a house: A step-by-step guide

1. Assess your financial situation and savings

Prior to looking for potential properties, know how much you can spend and how much your paycheck can handle for the monthly mortgage. Here’s how to begin:

  • Determine how much money you have saved for a deposit. Ideally, you should aim for at least 20% of the property’s purchase price to avoid paying Lenders Mortgage Insurance (LMI). LMI is an added upfront home purchase cost that can number in the thousands. Some lenders will approve home loans with as little as a 5% deposit. However, there are trade-offs for these, so do your research and work with a good broker.
  • Check your credit score: A good credit score will help you secure a mortgage with favourable terms. Obtain a copy of your credit report and address any issues.
  • Create a budget: Consider your income, expenses, and how much you can afford to repay each month on a mortgage. Doing research will give you an idea of current land and property prices. You can also apply for home buyer grants from the Australian government.

2. Get pre-approval for a mortgage

A pre-approval gives you a clear idea of how much you can borrow, which helps in narrowing down your property search.

  • Research lenders: Before applying for a loan, compare different lenders. Consider interest rates, fees, and features. 
  • Apply: Provide necessary documentation, including proof of income, savings, and identification.
  • Receive pre-approval: If approved, you’ll receive a letter from the lender indicating how much you can borrow.

3. Choose the right location for your new home

  • Proximity to work and amenities: Is the location convenient for your daily commute? Does it have access to schools, shops, and healthcare?
  • Community and lifestyle: Do you want to move to the suburbs? Or do you want to settle in the city? Think about the type of community and lifestyle you want for you and your kids. 
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4. Search for a real estate agent

With pre-approval in hand and a location in mind, you can start looking for properties:

  • Use real estate websites: Platforms like Domain and are excellent resources for finding properties.
  • Visit properties to get a feel for what’s available and ask questions about the property’s current state and history.
  • Contact a real estate agent: An agent can help you find properties that meet your criteria and negotiate on your behalf.

5. Conduct due diligence

Once you find a property you like, it’s time to conduct thorough checks:

  • Get a building and pest inspection: Hire professionals to inspect the property for structural issues and pests.
  • Review the contract of sale: Have a solicitor or conveyancer review the contract to ensure there are no hidden clauses or issues.
  • Check zoning and restrictions: Verify with local authorities if there are any zoning regulations or restrictions that could affect your plans for the property.

6. Make an offer

  • Negotiate the price: When you’re ready to proceed, work with your agent to negotiate a fair price based on market research and property conditions. You can also hire a professional valuer to give an independent valuation.
  • Set conditions in your proposal, such as finance approval and satisfactory inspection results.

7. Secure financing through a home loan

If your proposal is accepted, it’s time to finalise your mortgage:

  • Submit a formal application along with all required documentation.
  • Receive formal approval: Once approved, you will be provided a home loan offer outlining the terms and conditions.

Remember, your income is more than just your salary. Your bonuses, any interest earned by those maximiser accounts and even your child support income count. Even that side hustle on Etsy will be counted by the lender. On the other hand, credit card limits and even student debt will be assessed when they weigh up whether or not you are eligible for a loan.

A savvy mortgage broker helps present your income sources in the best possible light on a loan application. They’ll know what counts – and what doesn’t – for most lenders.

8. Exchange contracts of sale

  • Sign the contract: Both you and the seller will sign the sale contract.
  • Pay the deposit: Typically, a 20% deposit is required at this stage.
  • Cooling-off period: In some states, you may have a cooling-off period during which you can cancel the contract (with potential penalties).

9. Settlement and insurance

Finally, settlement. This is where the property title is officially transferred to your name. Conduct a final inspection to ensure the property is in the agreed state. Ensure you have building and/or home and contents insurance in place from the settlement date. Your solicitor or conveyancer will organise the transfer of funds to the seller. Don't forget about the additional purchase costs such as stamp duty and legal fees. Once settlement is complete, you’ll receive the keys to your new home. Hooray!

buy a house

10. Move in!

Congratulations! You’ve now become a homeowner. 

  • Set up utilities: Arrange for electricity, gas, water, and internet services.
  • Change address: Update your address with banks, government agencies, and other important contacts.
  • Enjoy your new crib!

Summary: Final advice on buying a home

Buying a home as a single mum is both challenging and rewarding. I recall the mix of excitement and nerves when I bought my home. Budgeting carefully, seeking financial advice, and using government grants were crucial. The support of a good real estate agent made all the difference. Despite the hurdles, the joy of providing a stable home for my child made it all worthwhile. It proved that dreams of homeownership are achievable.

The cost of purchasing a home goes beyond the asking price. There are hidden expenses lurking around every corner – inspection fees, land tax, moving costs, and the inevitable IKEA trip for furniture. Keep a detailed budget and be prepared for the unexpected. Work around your budget and never apply for a loan amount that you can't handle paying off every month. A fancy home is nice, but your family's basic needs should come first. Just follow this guide and you can make informed decisions throughout the process. Good luck on your journey to homeownership!

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Sophie Matthews

About the author

Sophie is big on educating people about the financial services industry and ensuring the best outcome for her customers. She has years of experience as a Mortgage Broker in both England and Australia with specialised knowledge in the Residential and Buy to Let sector.

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