Yep, we know, it can feel like someone's poking around in your finances, but trust us, it's all in the name of making sure you're set up for success.

1. Assess Your Financial Situation:

To kick things off, take a close look at your finances. Understanding your income, expenses, and savings is crucial for determining your borrowing capacity and establishing a realistic budget for your new home.

2. Check Your Credit Score

Your credit score plays a significant role in the home loan application process. Take the time to review your credit report and address any issues that may impact your score. This step will help you secure favourable loan terms and interest rates.

3. Now, let's talk pre-approval

When you apply for a loan, it's like someone lifting the hood on your finances and taking a peek around. Sure, it might feel a tad invasive, but rest assured, they're just making sure you can comfortably handle those repayments.

Now, let's talk spending habits. Lenders usually scope out around 3-6 months of your spending, so it's a good idea to give your expenses a once-over. To our pals subscribed to every streaming service out there, we get it—your Friday nights are sorted. But maybe it's time to scale back to one or two, just for now.

Here are a few other things that might raise an eyebrow with lenders:

To our pals subscribed to every streaming service out there, we get it—your Friday nights are sorted. But maybe it's time to scale back to one or two, just for now.

Buy Now Pay Later (BNPL)

While we love a good Afterpay shopping spree, BNPL can raise a red flag for lenders. They see it as credit, aka money you owe, and it can impact how much they're willing to lend you. So, if homeownership is on your radar, it might be time to hit pause on the Afterpay for a bit.

Betting

Sorry to be the bearer of bad news, but regular betting can put a dent in your borrowing power.

Cars

Time to dust off that Myki! Car repayments can seriously cramp your borrowing capacity. Just a $10k loan could shave off up to $100k from what you can borrow. Ouch.

Credit Cards

Even if you're a point hacking pro and always pay your credit card on time, lenders still see it as a liability. They'll check out your total limit and repayments when deciding how much to lend you. It might be a smart move to close those cards before applying for a home loan to boost your borrowing power.

4. So, what does a Lender like?

We know we've painted a pretty serious picture of a Lender. So what do they like to see?

Genuine savings, plain and simple.

They love seeing that you've been regularly squirreling away money in your savings account. It shows them that you're serious about this whole homeownership thing. And if you're getting a little help with your deposit, genuine savings become even more important.

Need a hand getting home loan ready? Chat with our finance partner! They'll help you navigate the ins and outs of the process, so you can work confidently towards that dream home.

Please note

Loan Gallery Finance Pty Ltd is independent of Simonds Homes and all advice is provided by Loan Gallery and not Simonds Homes.

The above advice is general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.

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