The Smartest Way to Buy a Semi-Detached Home First

Understanding Semi-Detached Homes for First Home Buyers

If you're looking at buying your first home, a semi-detached house might be the perfect middle ground between an apartment and a fully detached property. For self-employed professionals and those wanting to build wealth through property, semi-detached homes offer an affordable entry point into the property market while still providing the benefits of land ownership.

A semi-detached house shares one common wall with a neighbouring property, which typically makes it more affordable than a standalone home. This can be particularly valuable when you're working with a first home buyer budget and want to maximise your purchasing power.

First Home Buyer Eligibility and What You Need to Know

Before you start your property search, understanding first home buyer eligibility is crucial. As a first home buyer, you may qualify for several government incentives that can significantly reduce your upfront costs:

• First home owner grants (FHOG) - currently $10,000 for new homes in Western Australia
• First home buyer stamp duty concessions that can save you thousands in transfer duty
• The First Home Loan Deposit Scheme that allows you to purchase with a 5% deposit without paying Lenders Mortgage Insurance (LMI)
• Regional first home buyer Guarantee for properties outside metropolitan areas
• First home super saver scheme to help you build your deposit faster

For self-employed professionals, proving your income can require additional documentation, but it doesn't prevent you from accessing these valuable concessions.

Working Out Your First Home Buyer Budget

Calculating your borrowing capacity is the foundation of your property search. Your budget needs to account for:

1. The purchase price of the semi-detached home
2. Stamp duty (unless you qualify for concessions)
3. Legal and conveyancing fees
4. Building and pest inspections
5. Lenders Mortgage Insurance (LMI) if applicable
6. Ongoing costs like council rates and strata fees

Semi-detached homes often come with strata or body corporate fees, so factor these into your ongoing budget. These fees typically cover building insurance and maintenance of common areas.

Home Loan Options for Self-Employed Buyers

As a self-employed professional, you have access to the same home loan options as PAYG employees, though your documentation requirements differ. Understanding your choices helps you make informed decisions:

Low Deposit Options

You don't need a 20% deposit to purchase your first home. Several pathways exist:

• 5% deposit through the First Home Loan Deposit Scheme
• 10% deposit with LMI (which can sometimes be added to your loan)
• Gift deposit from family members (lenders typically accept genuine gifts)
• Guarantor options where a family member uses their property as security

Interest Rate Structures

Choosing between a fixed interest rate and variable interest rate depends on your circumstances:

A variable interest rate fluctuates with market conditions, which means your repayments can increase or decrease. The benefit is access to features like an offset account and redraw facility, which can help you pay off your loan faster.

A fixed interest rate locks in your rate for a set period (typically 1-5 years), providing certainty over your repayments. This suits borrowers who prefer predictable budgeting, though you may miss out on interest rate discounts if rates fall.

Many first home buyers opt for a split loan - part fixed, part variable - to balance security with flexibility.

Your First Home Buyer Checklist

Here's what you need to prepare when you apply for a home loan:

• Two years of tax returns and Notice of Assessments (for self-employed)
• Business Activity Statements or financial statements
• Bank statements showing savings history
• Identification documents
• Details of existing debts and commitments
• Evidence of genuine savings or gift deposit

Having these documents ready streamlines your first home loan application and helps you secure pre-approval faster.

The First Home Loan Application Process

When you're ready to apply for a home loan, here's what happens:

Pre-Approval Stage

Getting pre-approval before you start house hunting shows sellers you're a serious buyer. Pre-approval gives you a clear understanding of your budget and strengthens your negotiating position. For self-employed professionals, pre-approval typically involves a thorough assessment of your business income and financial stability.

Formal Application

Once you've found your semi-detached home and had an offer accepted, you proceed with the formal first home loan application. Your broker will submit your application to suitable lenders, manage the valuation process, and coordinate with your solicitor.

Why Semi-Detached Homes Build Wealth

For professionals focused on wealth creation, semi-detached homes offer several advantages:

• Lower entry price compared to detached homes in the same area
• Land component appreciates over time
• Potential rental income if you decide to convert it to an investment property later
• Equity growth that can fund future property purchases
• Lower maintenance requirements than a fully detached home

The shared wall structure means reduced exposure to weather on one side, potentially lowering maintenance costs. Many first home buyers use their semi-detached property as a stepping stone, building equity before upgrading to a larger home or keeping it as an investment.

Getting Your Home Loan Approved

Lenders assess several factors in your home loan application:

• Income stability and capacity to repay
• Credit history and existing debts
• The property's valuation and condition
• Your deposit size and source
• Your living expenses and financial commitments

For self-employed buyers, demonstrating consistent income over time is important. Most lenders want to see at least two years of business operation, though some specialty lenders offer more flexible options.

Working with experienced mortgage brokers who understand self-employed lending makes a significant difference to your approval chances and the interest rate discounts you can access.

Making Your Move

Purchasing a semi-detached home as your first property is an achievable goal with the right preparation and professional guidance. Understanding your home loan options, maximising first home buyer grants and concessions, and presenting a strong application all contribute to a successful outcome.

Whether you're a lawyer, accountant, doctor, or running your own business, your path to property ownership starts with understanding what's available and how to position yourself for approval.

Call one of our team or book an appointment at a time that works for you. At Makara Finance, we specialise in helping self-employed professionals secure their first home with tailored lending solutions that match your unique circumstances.