Buying your first home? There’s nothing quite like the excitement—and stress—of entering the property market. But the first major trap buyers fall into is they jump straight into open homes without knowing whether a bank will say “yes” to their loan.
In this session of The Property Frontline Podcast, I chatted with Vangeli Kollias from VK Financial—the financial teammate for first home buyers. We look into the exact steps to take before you start property hunting, and what banks really look for when approving your loan.
You can watch the podcast from the link at the end of this blog, or read on for the essential information all first time buyers need to know.
Why Finance Comes Before the Fun
Most buyers rush into property searching without understanding what they can afford. According to Vangeli, that’s putting the cart before the horse.
“Unless you have a money tree in the backyard, the first step is figuring out how much the bank will lend you.”
Banks won’t hand over money based on what you hope to buy—they assess your full financial situation. And in today’s competitive market, agents give preference to buyers who are already pre-approved. So knowing your budget early can save you time, heartache, and missed opportunities.
It will also increase your confidence and negotiating position because you will have clarity about your budget boundaries.
What Banks Really Look At
To become a buyer the banks say “yes” to, you need to understand their checklist. Here are the key factors:
- Credit Score & History
Your repayment behaviour on credit cards, personal loans, and any other debts will influence whether a bank sees you as trustworthy. - Genuine Savings
Especially with smaller deposits (like 5%), banks want to see you’ve saved the money yourself and held it for at least three months. For a $500,000 property, that means keeping $25,000 untouched in your account from day one of the three-month window. - Income vs Expenses
It’s not just about what you earn—it’s about what’s left over after your expenses, debts, and the bank’s “stress test.” For example, even if the loan interest rate is 6%, the bank will test your ability to repay it at 9%, just to make sure you could handle future rate hikes. - Employment Stability
If you’ve just changed jobs but stayed in the same industry, most banks are okay with that—just one payslip and your contract may be enough. But if you’ve changed careers completely, you might need to wait until your probation period ends before banks will approve you for a loan. - Liabilities & Spending Habits
Zip Pay, Afterpay, car loans, gambling transactions—they all add up and can reduce your borrowing power. Also, HECS debt still counts, although there will be some relief on this front after the new Labor policy rolls out in the next few months.
Pre-Approval Pitfalls to Avoid
Vangeli warns that not all pre-approvals are equal.
- Automated Pre-Approvals are quick and computer-generated. No human has reviewed your case—so if anything goes wrong after you make an offer, you’re exposed.
- Fully Assessed Pre-Approvals are reviewed by a real person at the bank. These are more secure and allow you to fix any issues before putting down a deposit.
Also note: Pre-approvals last for 90 days. Some lenders let you extend it once, but constant reapplications can hurt your credit score. So once you’re approved it’s best to try to buy within three to six months immediately following your approval.
Common Mistakes to Avoid
Even after pre-approval, your loan isn’t guaranteed. Vangeli sees these common slip-ups:
- Taking on new debt (like a car loan) after pre-approval but before your purchase has been made.
- Quitting or changing jobs
- Buying a high-risk property (like a serviced apartment in a high-density complex)
- Overpaying, only to have the valuation fall short—leaving you to fund the shortfall.
This is where a buyer’s agent (like me and the team at The Property Frontline : – )) becomes essential. We help you avoid risky properties and negotiate fair prices so your loan actually sticks.
Start Sooner Than You Think
Think you’re too early to talk to a broker or a buyer’s agent? Think again.
“Start the conversation today—even if you’re still saving,” Vangeli says. “We can help you figure out exactly what you need to work toward and what adjustments you can make to reach your target faster.”
Understanding your borrowing capacity early helps you set realistic goals. If you’re due for a pay rise or building your deposit, that insight gives you a roadmap—whether you’re buying a home to live in or your first investment.
Final Word: Preparation = Power
Buying your first home isn’t just about falling in love with the perfect place. It’s about being prepared—financially and emotionally—so you can act with confidence when the right opportunity comes up.
And that starts with the right support team.
If you’d like to explore your buying power or just want to know what’s realistic, reach out to Vangeli or us at The Property Frontline. We’re here to help you make smart choices and skip the stress.
Ready to get started?
✅ Reach out via the links below to speak with us about your buying journey.
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Contact Vangeli Kollias
- Website: https://theinvestorsway.com.au/
- Linkedin: linkedin.com/in/vangelikollias
- Instagram: @vangelikollias
Contact Debra Beck-Mewing : https://www.propertyfrontline.com.au/book_to_talk
Author: Debra Beck-Mewing
Debra Beck-Mewing is the Editor of Property Portfolio Magazine and CEO of The Property Frontline. With over 20 years of experience buying property across Australia, Debra is a skilled property strategist and buyers agent known for uncovering tailored opportunities — from family homes to multi-use investments.
She has deep expertise in advanced strategies including renovations, granny flats, sub-division, and development. A Qualified Property Investment Advisor (QPIA®), licensed real estate agent, and holder of a Bachelor of Commerce and Master of Business, Debra combines strategic insight with hands-on experience.
Debra is the creator of the Property Smart Track System™ – a professional property buying system that enables buyers to select, assess and buy property independently in today’s market. She also leads Buy Like A Genius™, a premium end-to-end buyers’ agency service for busy professionals seeking expert property acquisition without the stress.
As a passionate advocate for greater transparency in the property and wealth industries, Debra is a sought-after speaker, author, podcast host, and participates on numerous committees including the Property Owners’ Association.
