How to Hunt for Property as a First Home Buyer

You need to know what you can borrow before you start looking at property. A lot of first home buyers in the Snowy Mountains get caught out because they fall in love with a place, make an offer, then find out their deposit or borrowing power does not stretch that far.

The lending side comes first, then the property hunt. If you get that order wrong, you waste time, energy, and sometimes a chunk of your deposit on contract conditions you cannot meet. This article walks through the practical side of searching for property once you understand your budget and have your pre-approval sorted.

Work Out Your Borrowing Power Before You Look

Your borrowing power is the amount a lender will let you borrow based on your income, expenses, debts, and the deposit you have saved. Most lenders will calculate this using your before-tax income, then deduct an estimate for living costs, existing debt repayments, and a buffer to account for potential rate rises.

In our experience, buyers who come in with a solid picture of their income and outgoings get a borrowing estimate within a day or two. If you have casual or seasonal work, which is common around Jindabyne and Thredbo, lenders often want to see at least 12 months of payslips to confirm your average income. Self-employed buyers usually need two years of tax returns.

Once you have a figure, you know the price range you can search within. That keeps your property hunt focused and stops you wasting weekends at open homes for places you cannot afford.

Get Pre-Approval Before You Make an Offer

Pre-approval is conditional approval from a lender that confirms how much they are willing to lend you, subject to a valuation and final checks. It is not a guarantee, but it gives you confidence when you are ready to make an offer.

Most pre-approvals in the Snowy Mountains are valid for three to six months. That gives you a decent window to search without rushing. Sellers and agents take you more seriously when you have pre-approval in hand, especially in towns like Cooma or Berridale where stock does not sit on the market for long.

Consider a buyer who saved a 10% deposit and applied for pre-approval in March. They had their lending sorted by early April, spent six weeks looking at properties around Jindabyne, made an offer in mid-May, and settled in July. The pre-approval gave them the confidence to move quickly when the right place came up, and the seller knew they were not going to fall over at finance.

Understand What You Can Actually Afford to Repay

Affordability is not just about what a lender will approve. You need to be comfortable with the repayments, especially if rates go up or your income changes.

A rough way to check this is to look at your current rent or board, add any regular savings you are putting away each month, and see if that total covers the estimated loan repayment plus a bit extra for rates, insurance, and maintenance. If it does not, you might need to adjust your budget or look at a lower price range.

Winter employment around the mountains can be seasonal, so if your income drops outside the snow season, make sure your repayments are manageable year-round. Lenders assess your income over the full year, but you also need to be realistic about cash flow month to month.

Check What Stamp Duty Concessions and Grants You Qualify For

New South Wales offers a full transfer duty exemption on properties up to $800,000 for first home buyers, with a sliding concession up to $1,000,000. If you are buying vacant land to build, the exemption applies up to $350,000, with a concession up to $450,000.

The NSW First Home Owner Grant is $10,000, but it only applies to new builds or substantially renovated homes with a purchase cap of $600,000 or a land and build cap of $750,000. If you are buying an established home, you will not get the grant, but you can still access the stamp duty concession.

These concessions can make a real difference to how much deposit you need. On a property at the current median in Jindabyne, the stamp duty exemption alone can save you several thousand dollars that would otherwise come out of your savings at settlement.

Use the Australian Government 5% Deposit Scheme if You Qualify

The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with a 5% deposit without paying lenders mortgage insurance. Housing Australia guarantees the difference between your deposit and 20% of the property value.

From October last year, the scheme removed income caps and annual place limits, and the property price cap for regional areas like the Snowy Mountains was raised. You apply through a participating lender, not directly through Housing Australia. As of now, 31 lenders are on the panel, including three major banks and 28 non-major lenders.

This scheme is particularly useful if you have steady income but have not had time to save a full 20% deposit. You still need to show genuine savings and be able to service the loan, but it removes the upfront cost of lenders mortgage insurance, which can be tens of thousands of dollars depending on your deposit size and lender.

Search Within Your Pre-Approved Range and Stick to It

Once you have pre-approval, set your search filters to match your maximum borrowing amount minus a small buffer. That buffer accounts for the fact that not every property will value at the asking price, and you might need room for minor repairs or settlement costs.

In towns like Cooma, Berridale, and Jindabyne, stock moves fairly quickly during peak buying periods. If you are searching online, set up alerts for new listings in your price range so you do not miss anything. If you are looking at land packages or off-the-plan builds, make sure you understand the full cost including site works, council fees, and any upgrade options before you commit.

Do not stretch your budget hoping the lender will approve a bit extra. They approved you based on specific income and expense figures, and going over that amount usually means the loan will not go through.

Factor in Settlement Costs Beyond the Deposit

Your deposit is not the only cash you need at settlement. You also need to cover conveyancing or solicitor fees, building and pest inspections, loan establishment fees, and any adjustments for rates or water that the seller has prepaid.

In regional NSW, conveyancing fees typically sit between $1,200 and $2,500 depending on the complexity of the transaction. Building and pest inspections usually cost $400 to $800 combined. Lender establishment fees vary, but $600 is a common starting point.

If you are using a gifted deposit from family, most lenders will accept it as long as it is a genuine gift with no repayment expectation. You will need a signed declaration from the person giving the gift, and the funds usually need to be in your account for at least three months before settlement, or the lender will want to see the transfer and the declaration upfront.

Know the Difference Between Offset Accounts and Redraw

An offset account is a transaction account linked to your home loan. The balance in the offset reduces the amount of interest you pay on the loan without locking the money away. You can access the funds anytime.

Redraw lets you take money back out of your home loan if you have made extra repayments. Not all lenders offer redraw, and some charge a fee each time you use it. Redraw is also not guaranteed, meaning the lender can restrict access in certain circumstances.

If you plan to keep an emergency fund or save for renovations while paying off your loan, an offset account gives you more flexibility. If your lender does not offer offset, make sure redraw is available with no monthly or per-withdrawal fees.

Decide Whether to Fix or Stay Variable

A fixed interest rate locks in your rate for a set period, usually one to five years. You know exactly what your repayments will be during that time, which can help with budgeting. The downside is that if rates drop, you do not benefit, and if you want to break the fixed term early, you may face break costs.

A variable interest rate can go up or down depending on market conditions. You get more flexibility to make extra repayments without penalty, and you can usually access features like offset accounts and redraw.

Some buyers split their loan, fixing part and leaving part variable. That gives you some rate certainty while keeping flexibility on the variable portion. There is no single right answer, it depends on your income stability and how much you value certainty over flexibility.

The owner of Range Finance can walk through different rate structures with you based on your situation. If your income is steady year-round, you might be comfortable with variable. If you are seasonal or self-employed, a fixed portion might give you more breathing room.

Do Not Skip the Building and Pest Inspection

A building and pest inspection is not a legal requirement, but it is one of the smartest things you can do before you exchange contracts. The inspection picks up structural issues, water damage, termite activity, and other problems that might cost you thousands to fix later.

In the Snowy Mountains, weather and altitude can put extra strain on older homes. Heavy snow loads, freeze-thaw cycles, and moisture from seasonal conditions can cause roof damage, cracking, and timber rot that is not obvious during a quick walk-through. The inspection report gives you leverage to renegotiate the price or walk away if the issues are too serious.

Most buyers include a building and pest clause in their contract, which lets them pull out if the inspection uncovers major defects. That clause usually gives you 10 to 14 days to arrange the inspection and review the report before you commit.

Range Finance works with first home buyers across the Snowy Mountains who want their lending sorted before they start looking. Call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions