Getting a Home Loan

If you’ve come this far and are considering entering the property market, congratulations! That’s no easy feat…

Let us help you break down the next steps and the two main considerations when looking to get a home loan:

1. Borrowing power

All banks will assess your financial circumstances slightly differently but the crux of it is the same.

To work out your borrowing power, the banks firstly look at your income as well as your expenses to see how much you can borrow.

If you’re self-employed there are a few more hoops (and options) to jump through to determine  your income (for example this could be based on the most recently lodged financial years income or an average of the last 2 years of financial years income).

Your expenses include both everyday living expenses (groceries, utilities, travel etc) as well any financial commitments such as HECS debts, Credit Cards, Car Loans, Personal loans etc

Using the above, along with a little bit of “stress testing” the banks work out what you can comfortably borrow for your home loan.

2. Deposit (or security)

The next part of the equation is working out how much deposit you need and any applicable costs. Some of the purchase costs can include:

• Property deposit
• Stamp duty (if applicable)
• Conveyancer or solicitor fees
• Inspection costs
• Lenders mortgage insurance (if applicable)

The greater your home deposit, generally the better access to interest rates you have, the lower the repayments and you potentially avoid additional insurance costs.

Oh and there are always incentives and concessions around for first home buyers to make it a little easier!

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If you’re wanting to chat to a home loan expert to help work out your next steps when looking to buy your next home, please feel to reach out to our team!