Getting financially ready.
One of the first steps is to sit down with your finances and work out if you're ready to take on a home loan. Conduct a thorough audit of your income and costs over a standard year, as well as your current debt which includes vehicle loans, credit cards, personal loans and HECS. Think about how your income might change over time - are you aiming to step up in your industry or remain at a similar level for the time being? If you’re in the ADF, what do your next moves look like: are you likely to rank up in the next couple of years, or considering going on deployment?
Before approaching a lender, you need to have demonstrated at least three months of consistent saving or paying rent to prove you’re up to the responsibility of a loan. Banks can now also take into consideration your spending habits, so it’s worth keeping eating out and other discretionary spending in line in the months leading up to buying a property.
Once you’ve collated your financials, it’s time to calculate your borrowing power: input your income, costs and debts into our easy online calculator to see the kind of figure a bank is likely willing to lend you, as well as the monthly repayments - giving you a better idea of the budget and location you should be aiming for. Try plugging in different interest rates as well to see how the monthly repayments change - over a 30 year term, rates can shift a lot and could mean a few hundred extra dollars per month.
Head here to calculate your borrowing power.