Mortgage Maze - An Essential Guide To Buying Your First Home

5 years: draft a budget

You don't just have to save for the house deposit; you'll also need an extra five per cent for legal fees and stamp duty, which varies from state to state. For budget help, visit http://www.understandingmoney.gov.au.

4 years: start saving

Kick-start your savings by applying for a First Home Saver Account, which offers a whopping 17 per cent interest on amounts of up to $5000 a year. Visit http://www.homesaver.treasury.gov.au.

Credit crunched!

Avoid applying for credit cards to roll over debts. These will appear as "applications" on your credit history (even if the request was rejected), which may work against you.

Don't dump cash

Don't assume a $20,000 gift from your parents will guarantee a home loan approval – it won't. Banks will assume you can't save. Instead, deposit small, weekly amounts over a number of months.

6 months: get approval

Apply for a "pre-approval" certificate from your lender, which shows how much you can borrow and whether your loan will be approved when you find a property. Usually valid for three months, a home loan pre-approval certificate can be extended for a further three months.

5 months – House hunt and get your loan

Start your hunt at http://www.domain.com.au. Interested? Ask the agent for the contract and then finalise your home loan. The right loan can save thousands. (A $350,000 loan at 6.5 per cent interest will cost $5250 more a year than a loan at five per cent.) Compare home loans at http://www.canstar.com.au.

3½ months: Sort out the legalities

Have the contract? Now find a conveyancer ($500–$1000) by visiting http://www.conveyancingservices.com.au, or a lawyer ($500–$2000) at http://www.solicitors.net.au. They'll look over your contract, do property reports and ensure taxes are paid.

3 months: Have an inspection

House inspections usually cost between $200–$500. For building inspections, visit http://www.archicentre.com.au. For pest inspections (eg, termites), visit http://www.aepma.com.au.

Collect $7000

Boost your deposit with the $7000 First Home Owner government grant. Download an application form from your local state revenue office, or apply through your bank. Visit http://www.firsthome.gov.au.

2 months: bid and buy

See if you have to pre-register to attend the auction and make sure you have enough of a deposit, usually 10 per cent. Once your finance is approved, the seller will want the money within 60 days. At the end of the settlement period, you'll receive the deeds and keys to your new home.