Buying a home is often one of the most significant and costly decisions people make. For first-time homebuyers, it can be a daunting yet fulfilling experience. Navigating a sea of financial jargon, complex lending requirements, and the many moving parts of the property market can be overwhelming—but the sense of achievement once you secure your first home is truly rewarding.
Early last year, Emma and Tom approached Zenith to assist them with financing their first home. Below is a case study that details how we worked with them, the challenges they faced, and the successful outcome we achieved.
The Challenge
Tom and Emma, a recently married couple, came to Zenith after being referred by their family accountant. Both in their late twenties, they had steady careers in marketing and software development, earning strong salaries. However, they faced a few key challenges:
- They had been saving for their deposit for just under three years and had set aside $75,000, which they intended to use for their deposit, legal fees, conveyancing, and moving costs.
- They had limited knowledge of the home-buying process and were unsure of the different finance options available to them.
- They had little experience in navigating the loan application process, understanding government incentives like stamp duty exemptions, or managing the logistics of purchasing a home.
Our Approach
Our first step in working with Emma and Tom was to clearly understand their objectives, timeline, and financial situation:
- We discussed their homeownership goals and what they envisioned in their first home.
- We talked through their desired location and the kind of property they were interested in.
- We analysed their borrowing capacity and budget, taking into account the deposit they had saved and other factors such as household expenses and liabilities.
After this initial meeting, Emma and Tom completed our Fact Find, which helped us get a full view of their finances, including assets, liabilities, income, and expenditures.
With this information, we were able to present them with a tailored proposal that included:
- A scenario based on their $75,000 deposit and borrowing at 95% loan-to-value ratio (LVR)
- A detailed cash flow forecast showing how they could manage repayments and provided advice on how to pay down the loan as quickly as possible
- A proposed loan structure, repayment plan, and interest rates.
Although Emma and Tom both had solid salaries, they had spent a significant amount of money on fixed investments and supporting their families in the previous year, meaning their deposit was a bit smaller than originally planned. We helped them apply for the First Home Guarantee to maximise their borrowing without needing to pay Lenders Mortgage Insurance (LMI). We then helped them build a strategy to aggressively pay down the loan to reduce their LVR to 80% within a few years, which would give them the opportunity and option to refinance to a cheaper lender if available later down the track.
Additionally, as first-time buyers in Victoria, they qualified for stamp duty concessions, which was a helpful financial relief.
The Process
Once Emma and Tom were clear on the best financing option, we proceeded with their loan application and obtained pre-approval. This allowed them to focus on house hunting with confidence, knowing their finances were secured.
Throughout their search, we provided them with property reports using CoreLogic data, offering insights into market trends, comparable sales, and the demographic profiles of the areas they were considering.
After three months of property viewings, Emma and Tom found a home they loved and made an offer. We then guided them through the next steps:
- Coordinating a property valuation and building inspection
- Introducing them to a trusted solicitor who reviewed the contract and ensured everything was in order
Once their offer was accepted, we worked closely with their lender to ensure that their financing was finalised and ready for settlement. This involved coordinating with the solicitors and ensuring the necessary funds were available for the settlement day. We also connected them with a reliable transport and logistics company to make their transition as smooth as possible.
The Outcome
Within just a few months, Emma and Tom were able to purchase their first home and settle into a place they loved. They had successfully navigated the complexities of home financing, from understanding their borrowing options to securing a competitive mortgage and managing their overall budget.
We were thrilled to help Emma and Tom not only secure their first property but also lay the foundation for their future financial success. By the end of the process, they were able to move into their new home without the stress of unexpected financial burdens, all thanks to clear planning and expert guidance.
This case study highlights the importance of having an experienced financial partner when navigating the complexities of purchasing your first home. If you’re a first-time buyer, don’t hesitate to reach out to us at Zenith for expert advice and support every step of the way.
