My First Home Buyer Journey – 14th October 2024

I think I may have made a mistake in applying for my home loan too soon. Late last month, I submitted my credit and Victorian Homebuyer Fund applications to the bank with the required documents. I was motivated to submit these applications before the RBA announced that it would not be changing interest rates as I did not want to miss out on getting a place in the Victorian Homebuyer Fund. Also, given that it takes around 6 weeks to get a spot, I wanted to submit these applications soon to get the process started. This motivation was further fuelled by the fact that I would not be eligible for the Commonwealth Government’s “Help to Buy” scheme as I exceed the $90,000 per year income threshold as a single person. Hence, if I failed to get in the Victorian Homebuyer Fund, there would be no other shared equity schemes I would be eligible for. This would restrict my budget on buying my first home.

Since submitting my applications last month, the bank has sent numerous enquiries and requests for more documents to provide evidence behind my income and employment history. Having previously provided the minimum number of documents I needed to submit my applications, for the bank to come back to me asking for more documents was a bit dispiriting. In particular, the bank wanted a letter from my employer to show that I am now working full-time in the university. Because I have been moving around jobs over the past few months, they wanted that document to show that I am now earning a full-time income from the university.

Even though I have the letter to submit to the bank, I am hesitant to do so because one of my roles is contracted to end soon. My work in the university is split across two fixed-term roles. While one role will last until mid-2027, the other role is contracted to conclude by the end of the year. I did not disclose that detail in my credit application as I am in the process of getting that role converted into a continuing role and assumed that I would be working full-time in the university next year. The fact that the bank wants an employer letter from me saying that one of my fixed-term roles will end soon will lay bare the fact that I did not fully disclose my current employment situation in my credit application.

I have emailed the bank to see what they will do with my credit application. Best case scenario, they put my credit application on hold while I negotiate to secure a continuing role in the university, meaning I can work full-time in the university until at least mid-2027. Worst case scenario, I need to submit the required documents now with the current situation that one of my roles would be ending soon. This would either decrease my borrowing capacity massively, limiting the properties I can buy, or they reject my credit application outright. If that happens, that would put a black mark on my credit history which would make it harder for me to get a home loan. I am hoping that I can delay my credit application without the bank rejecting my application outright so that I have time to negotiate for a continuing role with the university.

Upon reflection, I was driven by FOMO in trying to get a place in the Victorian Homebuyer Fund before those places run out. The presence of the government getting an equity on my first home would allow me to buy a more expensive property with the money I have, increasing the chances that I would stay in it for a longer period of time. I overlooked the fact that full-time employment in the university was not guaranteed from the end of this year. If I had waited until I secured full-time work beyond 2024, I would have the evidence I need to show the bank that I have the income to keep up with my minimum repayments for my home loan. Here’s hoping that this is not a fatal mistake in my home buying process and that the bank would be kind enough for me to ameliorate this mistake.