Common Mistakes First Home Buyers Make When Searching

Searching Before You Have Pre-Approval

Don't start inspecting properties until you know what you can borrow. A pre-approval gives you a lending limit, confirms your deposit is acceptable, and tells you whether the property types you're considering will be funded by your lender.

Consider a teacher who inspects for three weekends, finds a unit she wants to buy, then discovers her lender won't fund a property with less than 50 square metres of internal space. She's wasted time and missed other opportunities. Pre-approval would have flagged that restriction before she started looking. You can read more about how getting loan pre-approval puts you in a stronger position before you begin your search.

Pre-approval also shows vendors and agents you're ready to proceed. In competitive markets, that perception matters. Sellers take serious buyers seriously.

Forgetting Stamp Duty and Settlement Costs in Your Budget

Your deposit isn't the only upfront cost. Stamp duty, conveyancing, building and pest inspections, and lender fees all add up. If you spend your entire savings on the deposit, you'll struggle to cover settlement.

For primary school teachers using the Australian Government 5% Deposit Scheme, stamp duty concessions vary by state. In New South Wales, full stamp duty exemption applies on homes valued up to $800,000. In Victoria, the exemption applies up to $600,000. In Queensland, new homes attract a full duty concession with no price cap, but established homes receive only a partial concession. If you're buying in South Australia, stamp duty relief applies to new homes and vacant land only, not established homes.

Your home loans for teachers structure might include an offset account, which can help you manage settlement costs without draining your deposit. But you still need to budget for the full amount before you sign a contract.

Ignoring What Your Lender Will Actually Fund

Not every property is acceptable security to every lender. Some lenders won't fund apartments smaller than a certain size, properties in specific postcodes, or units in buildings with commercial ground floors. Others exclude properties on busy roads, near high-voltage power lines, or with certain cladding types.

In our experience, teachers often assume that if a property is for sale, it's automatically acceptable to a bank. It isn't. A unit in an inner-city building might meet the price cap for the 5% Deposit Scheme, but if the lender identifies construction defects or servicing issues, your application will be declined.

Ask your broker to confirm property acceptability before you make an offer. It takes one phone call and prevents wasted deposit bonds, legal fees, and inspection costs.

Choosing Location Over Loan Structure

You'll live in the property, but the loan is what you'll be paying for the next 25 years. Picking a suburb you love but signing up for a loan with limited features, no offset account, or high exit fees will cost you more than choosing a location that's slightly further out and securing better loan terms.

Lenders mortgage insurance is another factor. If you're borrowing more than 80% of the property value and your lender doesn't offer an LMI waiver, the insurance premium can add thousands to your upfront costs. Some lenders offer LMI waivers for teachers, which can make a cheaper property in a less central location far more affordable than a pricier home closer to work.

Decide what loan features matter to you before you settle on a suburb. Then search within locations where your budget and loan structure align.

Relying on Online Calculators Without Checking Your Actual Serviceability

Online borrowing calculators give rough estimates. They don't account for your actual living expenses, existing debts, or the specific serviceability formula your lender uses. Two teachers with identical salaries can have different borrowing capacities depending on their credit card limits, car loans, and regular outgoings.

As an example, a teacher earning $85,000 a year with no dependents and no debts might be quoted a borrowing capacity around $550,000 by an online calculator. But if that teacher has a $15,000 credit card limit and is still paying off a car loan, the actual amount a lender will approve could be $80,000 less. The calculator doesn't see the liabilities. The lender does.

Get a full serviceability assessment from a mortgage broker for teachers before you start searching. It takes less than an hour and gives you a number you can rely on.

Not Factoring in Rate Rises When You Set Your Budget

Interest rates move. If you borrow at the top of your serviceability range and rates increase, your repayments will climb. That's manageable if you've left room in your budget. It's not manageable if you're already stretching to cover monthly costs.

When you're deciding how much to borrow, calculate repayments at a rate that's 2% higher than the current variable rate. If you can still afford the repayment, your budget has breathing room. If you can't, you're borrowing too much.

Fixed rate loans offer certainty for a set period, but once the fixed term ends, you'll revert to a variable rate. Don't assume today's rate will still apply in three years. Build in a margin for movement.

Skipping Inspections to Save Money

Building and pest inspections cost between $400 and $800 depending on the property size and location. Skipping them to save money is a mistake. Structural issues, timber rot, and pest damage can cost tens of thousands to repair, and if you don't identify them before settlement, you own the problem.

In Queensland and New South Wales, some contracts include a building and pest clause that allows you to withdraw if defects are found. In other states, you'll need to negotiate that clause into the contract. Either way, the inspection needs to happen before you go unconditional.

If the property is an apartment, request a strata report as well. It shows the building's financial position, any planned maintenance, and whether there are disputes or special levies on the horizon. Lenders review strata reports before they settle your loan. You should too.

Falling for Properties That Look Perfect Online

Photos and floor plans don't show noise, light, or how the property feels when you're standing in it. Listings don't mention the construction site next door, the flight path overhead, or the fact that the second bedroom is too small for an actual bed.

Inspect in person. Go twice if you can, once during the day and once in the evening. Walk the street. Check phone reception. See how far the nearest bus stop, school, or shops actually are. Online listings are marketing material. Treat them that way.

If you're relocating and can't inspect in person, arrange a video walk-through with the agent or hire a buyer's advocate to inspect on your behalf. Don't sign a contract based on photos alone.

Call one of our team or book an appointment at a time that works for you. We'll help you set a realistic budget, confirm what you can borrow, and make sure the properties you're inspecting are ones your lender will actually fund.

Frequently Asked Questions