How to Purchase a Unit as a First Home Buyer

Understanding Unit Ownership for First Home Buyers

For periodontists starting their property journey, purchasing a unit can be an excellent entry point into the Australian housing market. Units typically require a smaller deposit and offer lower maintenance responsibilities compared to freestanding houses, making them particularly suitable for busy dental specialists.

When buying your first home, understanding the differences between unit ownership and house ownership is crucial. Units come with strata fees, body corporate rules, and shared ownership of common areas, which affect both your first home buyer budget and ongoing expenses.

First Home Buyer Eligibility and Benefits

As a first home buyer in Australia, you may qualify for several government schemes designed to help you enter the property market sooner:

Government Schemes and Concessions:

• First Home Loan Deposit Scheme: Allows eligible buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance (LMI)
• Regional First Home Buyer Guarantee: Supports purchases in regional areas with reduced deposit requirements
• First home owner grants (FHOG): State-based grants providing financial assistance, though typically limited to new builds
• First home buyer stamp duty concessions: Significant savings on stamp duty for eligible purchasers

First home buyer eligibility criteria generally include being an Australian citizen or permanent resident, being over 18 years old, and not having previously owned property in Australia. Each scheme has specific income caps and property price limits that vary by state.

Preparing Your First Home Buyer Checklist

Before you apply for a home loan, thorough preparation will strengthen your application:

1. Check your credit score and address any issues
2. Save your deposit - aim for at least a 10% deposit, though low deposit options including 5% deposit schemes exist
3. Review your spending habits and demonstrate responsible financial management
4. Gather documentation including payslips, tax returns, and proof of savings
5. Research the strata report for any unit you're considering
6. Calculate all costs including strata fees, council rates, and insurance

The first home super saver scheme allows you to save for your deposit within your superannuation fund, providing potential tax benefits for periodontists in higher income brackets.

Understanding Home Loan Options

When exploring Home Loan options as a periodontist, you'll encounter various products tailored to different circumstances:

Interest Rate Structures:

• Variable interest rate: Fluctuates with market conditions, offering flexibility and potential interest rate discounts
• Fixed interest rate: Locks in your rate for a set period, providing certainty for budgeting
• Split loans: Combines both fixed and variable portions

Loan Features to Consider:

• Offset account: A transaction account linked to your mortgage that reduces interest charges
• Redraw: Allows access to additional repayments you've made
• Flexible repayment options: Extra repayments without penalties

As a periodontist, you may have access to specialised home loans for periodontists that offer preferential terms, including potential LMI waivers or interest rate discounts due to your professional status.

Low Deposit Options and LMI Considerations

Many first home buyers worry about saving a 20% deposit. Fortunately, several low deposit options exist:

Deposit Requirements:

• 5% deposit: Available through government schemes or lender programs
• 10% deposit: Common entry point with LMI required
• Gift deposit: Family contributions may be accepted, subject to lender criteria

Lenders Mortgage Insurance (LMI) protects lenders when you borrow more than 80% of the property value. While this adds to your upfront costs, it shouldn't necessarily prevent you from purchasing. Some lenders offer low deposit loans for dentists with reduced or waived LMI for medical and dental professionals.

The Home Loan Application Process

When you're ready to proceed with your first home loan application, understanding the process helps ensure a smoother experience:

Step-by-Step Application:

1. Obtain pre-approval: Demonstrates your borrowing capacity to real estate agents and sellers. Learn more about getting loan pre-approval
2. Find your unit: Search within your approved price range
3. Submit formal application: Provide comprehensive documentation
4. Property valuation: Lender assesses the unit's value
5. Loan approval: Final assessment and conditional approval
6. Settlement: Transfer of ownership and loan drawdown

Pre-approval is particularly valuable in competitive markets, giving you confidence about your first home buyer budget and demonstrating you're a serious buyer.

Specific Considerations When Purchasing a Unit

Units require additional due diligence beyond standard property purchases:

Essential Unit Checks:

• Review the strata report for upcoming special levies or maintenance issues
• Check body corporate meeting minutes for disputes or concerns
• Verify the sinking fund balance for future capital works
• Understand by-laws regarding pets, renovations, and rental restrictions
• Assess owner-occupier versus investor ratios

Lenders scrutinise units more carefully than houses, particularly regarding the number of units in the complex, commercial use percentages, and building condition. Some lenders restrict lending on units in complexes with certain characteristics.

Building Your First Home Loan Application Strength

As a periodontist, your professional status and income stability work in your favour when you apply for a home loan. However, strengthening your application further involves:

• Maintaining stable employment history
• Reducing existing debts and credit card limits
• Demonstrating genuine savings over several months
• Avoiding multiple credit applications
• Providing complete and accurate documentation

Consider exploring buying your first home resources to ensure you're fully prepared for the commitment.

Making Your Unit Purchase Decision

Purchasing your first unit represents a significant financial commitment. Beyond the deposit and loan repayments, budget for:

• Stamp duty (unless you receive first home buyer stamp duty concessions)
• Legal and conveyancing fees
• Building and pest inspections
• Strata fees
• Property insurance
• Moving costs

Understanding all costs ensures your first home buyer budget accurately reflects your financial obligations.

As first home buyers, periodontists often benefit from working with mortgage brokers who understand the dental profession's unique circumstances, including understanding income structures, professional expenses, and potential career trajectories that may not be immediately apparent to standard lenders.

Your Next Steps

Purchasing a unit as your first home buyer property can set you on the path to building wealth through property ownership. With various Home Loan options, government assistance programs, and professional status benefits available to periodontists, entering the property market may be more achievable than you think.

Taking advantage of available first home buyer grants, stamp duty concessions, and deposit schemes can significantly reduce your upfront costs and accelerate your property ownership timeline.

Call one of our team or book an appointment at a time that works for you to discuss your first Home Loan options and discover how we can help you purchase your first unit with confidence.