Proven Tips to Build Your First Home Buyer Checklist

What Documents Do You Need Before Applying for Finance

You need payslips from the past three months, tax returns if self-employed, and bank statements covering at least 90 days to show your savings history. Lenders also require identification such as a driver's licence or passport, and proof of your deposit source.

The deposit itself requires genuine savings, meaning funds that have sat in your account for at least three months. If you received a monetary gift from family, most lenders accept this alongside a statutory declaration from the donor. Inheritance, the sale of assets, and funds withdrawn through the First Home Super Saver Scheme also qualify as acceptable deposit sources without needing to meet the three-month requirement.

Consider a buyer who receives $40,000 from parents and has $15,000 in savings. That gives them a 10% deposit on a property without relying on the First Home Guarantee, avoiding the scheme's property price cap. They still need to budget for stamp duty and settlement costs, which in Victoria can include conveyancing fees, building and pest inspections, and bank fees totalling several thousand dollars. Having those funds clearly documented and sitting in a transaction account makes the approval process faster.

How the First Home Guarantee Changes Your Deposit Requirements

The First Home Guarantee allows eligible buyers to purchase with just a 5% deposit without paying Lenders Mortgage Insurance. Since October, there are no income caps and no place limits, meaning buyers in Kew can access the scheme regardless of earnings or property location.

LMI typically costs several thousand dollars on a low-deposit loan, and the scheme removes that cost entirely. A 5% deposit on a property valued at the scheme's price cap means you need less upfront cash, but you still need to fund settlement costs separately. The scheme does not cover legals, inspections, or adjustments, so plan for those in addition to your deposit.

In our experience, buyers who use the scheme often pair it with genuine savings and a smaller gift, rather than relying entirely on family help. Lenders still assess your income, expenses, and borrowing capacity the same way they would for any other application. The 5% deposit gets you in, but your servicing still needs to support the loan amount.

Stamp Duty Concessions in Victoria for First Home Buyers

Victorian first home buyers pay no stamp duty on properties valued up to $600,000, and a reduced amount on properties between $600,000 and $750,000. Above $750,000, the concession does not apply and full duty is payable.

Kew sits in a higher price bracket, and many properties exceed the $750,000 threshold. For those purchases, stamp duty becomes a significant upfront cost. At $850,000, duty is approximately $45,000. That amount cannot be rolled into the loan and must be paid from savings or family assistance at settlement.

For buyers targeting units or smaller homes under the $750,000 mark, the reduced duty makes a material difference. A property at $700,000 incurs around $12,000 in duty rather than $38,000, freeing up capital for furniture, renovations, or retaining a buffer in your offset account after settlement.

Choosing Between Fixed and Variable Interest Rates on Your First Loan

A variable rate gives you flexibility to make extra repayments without penalty and provides access to an offset account. A fixed rate locks in your repayment amount for a set period, protecting you from rate increases but typically limiting additional repayments and removing offset access during the fixed term.

Many first home buyers split their loan, fixing a portion for certainty and leaving the rest variable for flexibility. That structure works well if you expect to receive bonuses, tax refunds, or other lump sums you want to park in an offset. The variable portion allows you to reduce interest without triggering break costs, while the fixed portion provides predictable repayments.

As an example, a buyer borrowing $650,000 might fix $400,000 for three years and leave $250,000 variable with a full offset. They deposit their salary and savings into the offset, reducing interest on the variable portion, while the fixed portion provides budget certainty. If rates drop during the fixed period, they miss out on savings on that portion, but they are protected if rates rise.

How Pre-Approval Helps You Move Quickly in Kew

Pre-approval confirms how much you can borrow before you start attending inspections. It gives you a clear budget, speeds up the formal approval process once you find a property, and signals to agents and vendors that you have finance ready.

Kew attracts strong competition, particularly for well-presented homes close to Kew Junction or near the Yarra River parklands. Having pre-approval in place means you can make an offer with confidence, knowing your lender has already assessed your income, savings, and deposit source. The formal approval after contract signing is faster because most of the assessment work is already complete.

Pre-approval typically lasts 90 days, though some lenders offer six months. If your circumstances change during that period, such as a pay rise, job change, or additional credit card, notify your broker immediately. Lenders reassess your position at formal application, and undisclosed changes can delay settlement or require revised documentation.

Stacking the First Home Guarantee with State Grants

Victoria offers a $10,000 First Home Owner Grant for new homes valued up to $750,000. You can combine this with the First Home Guarantee to purchase a new property with a 5% deposit, no LMI, and a $10,000 cash grant that can be used toward your deposit or settlement costs.

The grant applies to new builds, house and land packages, and substantially renovated properties where at least half the structure is replaced. It does not apply to established homes, regardless of age or condition. If you are buying an older home in Kew, you still benefit from the stamp duty concession but not the cash grant.

The Victorian Homebuyer Fund is another option, allowing the state government to contribute up to 25% of the purchase price in exchange for an equivalent share of equity. That scheme is income tested and has property price caps, but it allows you to purchase with a smaller deposit and lower ongoing repayments. You can buy out the government's share at any time, or sell and split the proceeds according to ownership percentage.

Building a Realistic Budget That Includes Ongoing Costs

Your budget needs to account for repayments, council rates, insurance, utilities, and maintenance. Lenders assess your ability to service the loan at a buffer rate above the actual interest rate, but you should also model your own cash flow to confirm you can manage the repayments comfortably.

Kew's proximity to the CBD and established infrastructure means rates and insurance can be higher than outer suburbs, particularly for larger homes or properties with heritage overlays. Body corporate fees apply to units and townhouses, and these can range from $1,000 to $5,000 per year depending on building size and shared amenities.

In a scenario where a buyer purchases a two-bedroom apartment near High Street with a body corporate fee of $3,500 annually, repayments of $3,200 per month, and combined rates, insurance, and utilities of $600 per month, their total monthly housing cost is around $3,800 plus the body corporate component. If their combined household income is $10,000 per month after tax, that leaves sufficient room for living expenses and savings, but any reduction in income or increase in rates would tighten the margin.

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