What are the Steps in the Home Buying Process?

The home buying process involves securing pre-approval, finding your property, submitting a full application, and coordinating settlement. Each stage requires different documents and actions, and understanding the sequence helps you prepare for what comes next.

For dental assistants working in clinics or hospitals, your income structure is typically straightforward, which makes the application process more predictable than it might be for self-employed practitioners. You'll still need to demonstrate consistent employment and enough savings to cover your deposit and associated costs, but lenders generally assess your application based on PAYG income without the additional complexity of ABN income or practice ownership.

Getting Pre-Approval Before You Start Looking

Pre-approval confirms how much you can borrow before you begin inspecting properties. A lender reviews your income, expenses, and credit history, then provides conditional approval valid for three to six months.

Consider a dental assistant earning around $60,000 annually who has been working full-time for two years. They might approach a broker to understand their borrowing capacity and receive pre-approval for a loan amount that factors in their income, existing commitments like a car loan or HECS debt, and monthly living expenses. The pre-approval letter gives them confidence when making an offer because they know exactly what they can afford and that a lender has already reviewed their financial position.

Most lenders require payslips from the past three months, recent tax returns if you have additional income sources, and bank statements showing your savings history. The statements need to demonstrate genuine savings held for at least three months, not funds that appeared suddenly from a gift or bonus unless properly documented.

Choosing Between Variable Rate and Fixed Rate Options

Variable rate loans move with the market, while fixed rate loans lock your interest rate for a set period, usually one to five years. A split loan combines both by dividing your total loan amount between variable and fixed portions.

In our experience, dental assistants often value certainty around repayment amounts because their income is steady but not high enough to absorb sudden rate increases without adjusting other spending. A variable rate offers flexibility to make extra repayments and access features like an offset account, which reduces interest by offsetting your savings balance against the loan amount. A fixed interest rate home loan provides repayment stability but typically restricts additional repayments and may carry break costs if you need to refinance or sell before the fixed term ends.

If you're buying your first property and want to build equity quickly, a variable rate with an offset account lets you deposit your salary and any savings into the offset, reducing the interest calculated daily on your loan balance. If you prefer knowing exactly what you'll pay each month, a fixed rate might suit you during the initial years of ownership when your budget is tightest.

What Happens After Your Offer Is Accepted

Once your offer is accepted, you move from conditional pre-approval to full home loan application. The lender orders a valuation of the property to confirm it matches the purchase price, and you provide updated documents including the signed contract of sale.

The valuation protects the lender by ensuring the property is worth what you're paying. If the valuation comes in lower than the purchase price, the lender may reduce the loan amount, requiring you to increase your deposit or renegotiate the sale price. This rarely happens in stable markets, but it's a step that can delay settlement if the valuation takes longer than expected or if the lender requests additional information about the property's condition.

You'll also arrange building and pest inspections during this stage if your contract includes a due diligence period. The lender doesn't require these inspections, but they protect you from buying a property with structural issues or pest damage that could affect its value or safety.

Understanding Loan to Value Ratio and Lenders Mortgage Insurance

Your loan to value ratio (LVR) is the loan amount divided by the property's value, expressed as a percentage. An LVR above 80% typically triggers Lenders Mortgage Insurance (LMI), which protects the lender if you default but adds several thousand dollars to your upfront costs.

As an example, a dental assistant buying a unit valued at the current median for their target suburb with a 10% deposit would have a 90% LVR and need to pay LMI. The premium varies based on the loan amount and LVR, but it can range from $5,000 to over $20,000 depending on the property price. Some lenders offer LMI waivers for medical and dental professionals, though these are generally reserved for dentists and specialists rather than dental assistants. It's still worth asking your broker whether any lenders extend this benefit to allied health roles.

If you're close to a 20% deposit, waiting a few more months to save the additional amount can remove the LMI cost entirely. If you need to buy sooner, some lenders let you capitalise the LMI premium into the loan amount rather than paying it upfront, though this increases your total loan balance and the interest you'll pay over time.

Coordinating Settlement and Taking Ownership

Settlement is the final legal transfer of ownership, usually handled by conveyancers or solicitors who exchange documents and funds on your behalf. Your lender releases the loan funds to the seller's solicitor, and you receive the keys once the transaction is recorded.

You'll need to pay stamp duty, conveyancing fees, and any remaining deposit amount before settlement. In most states, first home buyers receive stamp duty concessions or exemptions if the property value falls below a set threshold, which can save several thousand dollars. Your conveyancer will calculate the exact amount and provide a settlement statement a few days before the scheduled date.

On settlement day, your offset account or redraw facility becomes active if your loan includes those features. You can start making extra repayments immediately if your loan structure allows it, which reduces the principal balance and the total interest payable over the life of the loan.

Managing Your Home Loan After Settlement

Once you've settled, your focus shifts to managing repayments and using your loan features to build equity. Principal and interest repayments reduce your loan balance each month, while interest only repayments cover only the interest portion and keep the principal unchanged.

Most owner occupied home loans are structured as principal and interest because they help you build equity and reduce debt over time. Interest only loans are more common for investment properties where the borrower wants to maximise tax deductions, but they don't suit most first home buyers who want to own their property outright eventually.

If your loan includes a linked offset account, keeping your salary and savings in that account reduces the interest charged without locking the funds away. If your loan includes redraw, you can make extra repayments and withdraw them later if needed, though some lenders charge fees or restrict how often you can access redraw funds.

Your loan will also have a rate review or revert date if you chose a fixed rate. When the fixed term ends, the loan automatically moves to the lender's standard variable rate unless you contact them to negotiate a new rate or refinance to another lender. Staying aware of when your fixed term expires lets you compare rates and avoid reverting to a higher rate without realising it.

We work with dental assistants regularly who want to understand their loan options without feeling pressured into products that don't match their income or goals. The process is more about aligning the loan structure with how you're paid and what you plan to do with the property than it is about finding the absolute lowest rates. Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions