Updated: Mar 31, 2022
With all of the doom and gloom in the media around the struggles of buying a house, home ownership can almost feel impossible. However what you don’t hear are the many many successful first home buyers who have managed to get themselves a home.
Thanks to the recent credit changes, it has gotten harder to get a home loan, however far from impossible. Instead now you just a have to be a little more patient and prepared and be ready to do a little bit of leg work before you go for a pre-approval.
Here’s a few tips to keep in mind if you are hoping to buy your first home this year….
REDUCE YOUR SPENDING
This is honestly the most important thing you can do if you are looking to buy. Banks want to see clean bank accounts, with minimal spending. It’s important to be able to show three months of bank accounts without excessive spending on things like clothes, takeways, and multiple subscriptions. We recommend cutting any extras out for at least three months before your pre-approval for the best chance of getting approval.
DON’T SWAP JOBS
If you are thinking about changing jobs or even becoming self-employed in the lead up to buying a home, we recommend waiting a while. Having three months of payslips from one employer, or 6 months of self-employment income is best, so don’t go job hopping or create that start-up just yet.
SAVE AS MUCH AS POSSIBLE
Banks like to see a deposit and the bigger the better. If you can prove you are regularly saving, you will have a much better chance of getting a home loan. Take that money you might have spent on that dress or lunch and pop it away in a savings account instead. You'll be amazed how quickly it will add up!
Debts negatively effect the amount you can borrow, so getting these repaid before you go to the bank is the best idea. Repay and cancel things like credit cards and Afterpay, and look into debt consolidation if you are juggling multiple debts. If you have student loan debt, we recommend discussing this with us before you look to get pre-approved, so we can advise you on the best method to tackle this.
The government have launched an investigation in to the changes to the CCCFA, with rules to be softened a little in the coming months. In the meantime, our biggest tip is to spend as little as possible and save as much as you can in the lead up to getting pre-approved. It might mean a few quiet months, but the payoff will be a new home, so well worth it!