Home Loan Tips
Preparing for a home loan
Once you know what your repayments may be, start to save in a specific saver account the difference between your current rent and the repayments as this total amount will be what you will be paying once you purchase. Don’t draw out of this for the 3 months prior to your application.
Your goal is to have a minimum of 5% of the purchase price in genuine savings/equity prior to purchase. Non first home buyers will require extra for costs. Ensure that any money that may be gifted (by a parent) is placed into an account in your name 3 months prior to purchase, this is then considered as genuine savings and your application will be stronger.
If you have extra cash available you can choose to pay down any personal debts as long as you still have your deposit amount secure. Ensure that there are no missed payments on credit cards or loans. Missed or late payments are considered by lenders as an indication of how you will repay your home loan.
FHOG makes an excellent contribution to paying off your loan. It is not accepted by lenders to be used as part of your 5% deposit. Once you receive it, use it as an extra repayment. It will reduce your loan term and amount of interest paid considerably in the long run.