Pre-Purchase Planning: What Not to Do as a First Home Buyer

Most nurses and midwives know how much they need to save. Fewer know what they need to avoid doing with that money before applying.

Pre-purchase planning is the three to twelve months before you formally apply for a home loan. What you do during that window determines whether your First Home Buyer Loans for Nurses application is approved without delay or whether it triggers additional questions, document requests, or reduced borrowing capacity. For nurses and midwives working shift patterns and managing irregular overtime or penalty rates, the planning phase is where eligibility gets protected or undermined.

Don't Move Savings Between Accounts Without Reason

Lenders verify that your deposit is genuine savings, not borrowed funds. Genuine savings are funds that have been held in your account for at least three months. Moving money between accounts, especially large lump sums close to application, creates gaps in the transaction trail that lenders cannot verify.

Consider a registered nurse with $40,000 saved across two accounts who consolidates everything into a single offset account four weeks before applying. The lender sees $40,000 appear suddenly with no clear origin. Even though the funds are legitimate, the nurse now needs to provide three months of statements for both the old accounts and the new account, plus a signed explanation. If one of the old accounts was closed or the statements are incomplete, the deposit may not be accepted as genuine savings under some lender policies.

Leave your deposit where it is once you have accumulated the amount you need. If you must move funds, do so at least three months before you intend to apply and retain full statements for all accounts involved.

Don't Apply for Credit in the Months Before You Apply for a Home Loan

Every credit application you submit leaves an enquiry on your credit file. Multiple enquiries in a short period signal financial stress to lenders and can reduce your credit score. More importantly, any new credit limit, even if unused, reduces your borrowing capacity.

A midwife earning $95,000 applies for a $15,000 credit card to take advantage of a retailer promotion two months before lodging a home loan application. The card has a zero balance but the $15,000 limit is treated by the lender as if the midwife is spending 3 percent of that limit each month. That notional monthly commitment of $450 reduces her borrowing capacity by approximately $90,000, depending on the lender's serviceability buffer and assessment rate. The card was never used, but the damage to borrowing capacity is the same as if it were fully drawn.

If you plan to apply for a Home Loan within six months, defer any new credit applications until after settlement. If you already hold credit cards or personal loans you do not use, consider closing them before you apply.

Don't Change Jobs Without Understanding the Impact on Income Assessment

Lenders assess your income based on how long you have been in your current role and your employment type. Changing jobs during the planning phase does not disqualify you, but it does change what income the lender will accept and how they calculate serviceability.

For a nurse moving from a public hospital to a private clinic, the change might involve a shift from permanent employment to casual or contract terms. Even if the hourly rate is higher, lenders apply different income treatment to casual and contract income. Many lenders require at least three to six months of payslips in a new casual role before they will include penalty rates and overtime. If the nurse applies within the first month of the new role, the lender may assess only the base hourly rate across a standard roster, which could reduce assessed income by 20 to 30 percent compared to what the nurse actually earns.

If you are planning to change employers, speak with a Mortgage Broker for Nurses before you resign. Some lenders accept income from a new role immediately if the role is permanent and in the same occupation. Others require a probation period to be completed. Knowing the assessment treatment before you move allows you to time the change around your application or choose a lender that accepts your income structure from day one.

Don't Use Your Deposit to Pay Off Non-Housing Debt Unless It Improves Serviceability

It seems logical to clear a car loan or credit card before applying for a mortgage, especially if the balance is small. But if paying off that debt requires you to drain your savings below the deposit level you need, you have delayed your application without improving your position.

A nurse with $50,000 in savings and a $12,000 car loan considers paying off the car to reduce monthly commitments. The car loan repayment is $320 per month. Paying it off would leave $38,000 in savings. If the nurse is buying at the property price cap under the 5% Deposit Scheme for Nurses, that $38,000 may not be sufficient to cover the deposit, stamp duty concessions where applicable, and settlement costs. The nurse has improved serviceability marginally but no longer has enough cash to proceed.

Run the numbers with your broker before you make any lump sum debt payment. In many cases, keeping the savings intact and allowing the lender to factor the debt into serviceability is the better approach, particularly if the debt will be cleared from surplus funds post-settlement or refinanced into the mortgage.

Don't Forget That Genuine Savings Excludes Funds You Cannot Prove

Genuine savings must be verified. Cash deposits, gifts that appear suddenly without a signed declaration, and transfers from offset accounts linked to other people's loans are all treated as non-genuine unless you can document their origin.

A midwife receives $10,000 from her parents as a gift toward her deposit. The parents transfer the funds from their home loan offset account. The midwife deposits the $10,000 into her transaction account and applies for a loan two weeks later. The lender sees a $10,000 credit with the description "transfer" and asks for proof of origin. The midwife provides a signed gift letter from her parents. The lender then requests three months of statements from the parents' offset account to confirm the funds were not borrowed. The parents' account shows the offset balance reduced from $18,000 to $8,000 on the same day as the transfer, but the home loan statement shows a corresponding redraw of $10,000 two days earlier. The lender determines the gift was funded by a redraw, not from genuine savings held by the parents, and excludes the $10,000 from the deposit assessment.

If you are receiving a gift, ensure the donor provides a statutory declaration confirming the funds are a gift with no repayment obligation, and that the funds have been held in their account for at least three months. If the donor is using a redraw or equity release to provide the gift, declare that upfront so your broker can confirm whether the lender will accept it.

Don't Ignore Upcoming Changes to Stamp Duty Concessions or Grant Deadlines

Stamp duty concessions and first home owner grants are subject to legislative change, and some programs have fixed end dates. Delaying your planning or application without understanding the timing of these changes can cost you thousands of dollars or remove access to a scheme altogether.

State-based first home owner grants and duty concessions are regularly amended, extended, or withdrawn depending on government priorities and budget cycles. Nurses and midwives eligible for state-based support need to understand what concessions apply now, what the thresholds are, and whether any changes are scheduled. For example, the Northern Territory's HomeGrown Territory Grant of $50,000 for new home purchases applies to contracts signed between 1 October 2024 and 30 September 2027. A nurse planning to buy in Darwin in late 2027 without checking the program's end date may assume the grant will still be available when it has already closed.

Before you begin property inspections, confirm the current grant and concession settings in your state or territory and check whether any sunset clauses or threshold changes are due to take effect. This allows you to plan your application and contract timeline accordingly.

Don't Assume You Need 20 Percent to Avoid All Costs

Many first home buyers delay purchasing because they believe they need a 20 percent deposit to avoid Lenders Mortgage Insurance. While a 20 percent deposit does eliminate LMI under standard policy, several lenders offer LMI Waivers for Nurses at higher loan-to-value ratios, and government schemes allow eligible buyers to purchase with a 5 percent deposit without paying LMI at all.

Under the Australian Government 5% Deposit Scheme, eligible first home buyers can purchase with a 5 percent deposit and no LMI. Housing Australia guarantees the difference between the deposit and 20 percent of the property value. There are no income caps, no annual place limits, and the scheme applies to both new and established homes. Separately, some lenders waive LMI for registered nurses and midwives at loan-to-value ratios up to 90 percent, subject to income and registration requirements. These policies vary by lender and are not universally available, but where they apply, they allow nurses and midwives to purchase sooner without waiting to save a larger deposit.

Understanding what deposit level you actually need, based on your income, occupation, and the property you are targeting, prevents unnecessary delay and allows you to enter the market sooner with a manageable deposit.

Pre-purchase planning is not about perfection. It is about protecting your eligibility and making sure that when you are ready to apply, your income, savings, and credit position support the loan amount you need. Small decisions made months before you apply can have a material impact on your borrowing capacity, your deposit treatment, and your ability to settle on time.

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