Understand your credit rating
Your credit history will play an important part of your home loan application. You can access your credit report at www.mycreditreport.com.au and you are entitled to one free credit report per year. You may have old debts with overdue payments or defaults, make sure you clear these up before applying.
Save Save Save!
Start a weekly/fortnightly budget and start saving! Try and have at least 3-6 months of serious saving behind you before applying. Now is the time to start reducing your spending by doing a few easy things; taking your lunch to work, riding a bike or walking instead of using your car, cut down on entertainment spending and maybe even cut out a few of those coffees each week. You can read other tips on how to save money you could be spending online here.
Reduce debt
Try to clear any credit card, store card or personal loans before applying for a home loan. If you have several cards, try to reduce them to one. The less money you owe, the better your chances are of being approved for your home loan. Also reduce the limit on any credit card you keep.
Prove stability
Having a stable job, rental and banking history will help with your application. A career change isn’t a good idea when you’re in the process of applying for a home loan, nor is moving to another rental property. The lender will also be accessing your banking history, so make sure you have no late payments or overdue fees for the past 3-6 months.
Decide on your limit and apply for pre-approval
Use our home loan repayment calculator to work out how much you can afford in repayments. Remember to give yourself a buffer, so you don’t cut yourself short. Once you have an amount you’re happy with, call us on 1300 802 222 or drop into your nearest branch to talk about applying for pre-approval. Once you have pre-approval you’ll know exactly what your borrowing limit is, therefore reducing the amount of time spent looking (or falling in love with) houses that are beyond your limit.
