When many would-be first time buyers start planning to buy their own home, they often simplify their approach to just simply working out their borrowing power and looking at open houses. In reality, there’s much more to it than that.
To help you answer your burning first home loan questions we’ve provided this step-by-step approach to getting your finances in order, to help you confidently and comfortably apply for a home loan.
Step 1: Get your finances in order - get your credit report
Understand the full scope of your finances and apply to get your credit report and your credit report for free. Many young people don’t pay any attention to their credit score until the damage has been done. Stay on top of your credit score, and if it’s low, you can focus on boosting your credit rating. One simple tip is to ensure you have automatic withdrawals setup for This way, you can avoid missing any repayments, which may negatively impact your credit score.
Step 2: Use a budget planner - how much can I borrow?
By figuring out your current budget, you can discern how much you could theoretically afford to repay off your future mortgage each month. Consequently, you can use these numbers to get an idea of how much you will be able to borrow for your first home loan. By using Greater Bank’s Budget Planner Calculator and Borrowing Power Calculator, you can distinguish what your disposable income is, as well as your current expenses, and prepare for your financial future.
Step 3: Save, save, save
Keep track of your savings – how much do you realistically have to put forward as your deposit? How much will you need to set aside for furniture, renovations, inspections and additional home owner expenses such as Stamp Duty and Home and Contents Insurance? You can easily track your spending and savings with Greater Bank’s mobile banking app and work towards your deposit savings goal with a High Interest Savings Account and our easy to use.
Step 4: Work out what you can afford
Once you have more of an idea on the intricacies of your finances, you can use our home loan repayments calculator to loan terms that fit to your situation.
Step 5: Look out for the perfect property within your budget
Now you have a better understanding of what you can afford and what loan terms you would be committing to, it’s time to look at the market with fresh eyes. If you see a property which would require more renovations, you can adjust your budget and loan terms with confidence to see if it is a property that you can afford. | Greater Bank
The reality is, although it may be easy to just get a borrowing power estimate and hit the market at the top end of your predicted price range, the last thing you want to do is get in over your head. Especially when buying a first home, committing to a property and loan you can manage within your budget is essential.