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It doesn’t matter if you’re a first time home buyer or well versed in the property market. Purchasing a home in Australia can be a stressful and lengthy experience for anyone. It requires time, intensive research and, most of all, patience. The team at Lendi have created a simplified guideline highlighting the most crucial steps to consider before purchasing a property. Follow our guideline and you’ll have your forever home sooner than you think. 

## How much can you afford to repay each month?
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## 1. Do a preliminary lifestyle check

Buying a property is nothing to sneeze at. Before you leap into looking at available properties, allow yourself time to reflect on your financial status and commitment capacity. Are you prepared to buy a home? Are you willing enough to take the risk? Lifestyle checks to consider include: 

###   __Job security:__
  Check if your current job produces a sufficient income for repayments and other       home loan costs. Financial institutes expect you to stay with your job for at least   12 months and have more trust in you the higher you job security is. Consider this   if you think you will continue your current employment. This could affect your       position to buy a property. If you know your career path is secure, you may be       given the all clear. A secondary source of income to acquire your home loan can       also become necessary if you are a low-income earner or on benefits. 

###  __ Family:__
  Having children can radically change your lifestyle and influence your drive to       look for a home, but while saying that, you may also be more motivated to search     for a home if your family is expanding. Consider if you’re ready to settle down and   have kids.The greater number of dependents, the lower the amount you can borrow for   your home loan and having children in the near future can affect your periodic       repayment. Family Tax Benefits are not considered as a main source of income. When   you apply for your home loan, make sure you have supporting documentation at the     ready. 
  
![family-fun](//images.contentful.com/o2gysnvd04sg/4BX0S1fMBWkayKAqeAeywK/525c35505a69975610865b18ca3ba31f/family-fun.jpg)

### __Travel:__
If you are looking to buy a home but have been saving for a holiday, it may be time   to reconsider where your extra money is being deposited. Reconsider your travel bug   lifestyle as frequent trips can land you in unnecessary debt. That being said, there is the possibility of renting out your new home and using the income to go towards your monthly repayments. 

###   __Debt:__ 
  No debt equals a smooth home loan application. Be honest with your Home Loan         Specialist. Their job is to assist you in making your dream purchase possible. 
  Settle any personal loans first and improve your credit before applying to any kind   of home loan. Any bad credit will decrease your chances in buying a property. 
  Make regular deposits into a savings account. Having a savings account can work       wonders when you need it. 

###   __Deposit Amount:__ 
  In Australia, it’s best to have 20% of the mortgage as a deposit. This is the most   logical way to disclude lenders mortgage insurance in your total cost. The           alternative are low-deposit loans, although we recommend that you go back and check   your financial security to see if you can afford the home loan. 

###   __Costs:__
  We recommend considering hidden and upfront costs, as these can be a surprise when   they are added to the total of your home loan. It is important to be aware of all     the expenses being included. Upfront costs include; stamp duty, legal charges, pest   inspection, home loan application fee and property valuation. Hidden costs include   maintenance, security, utilities, strata levies, council fees, time and               professional advice. 

%%Dreaming of purchasing a new home?%%

## 2. Research the area and property

![australian-street](//images.contentful.com/o2gysnvd04sg/17dIppKUQG220E884oSesS/3c42a9ad7d6432c4f283afd9804253f8/australian-street.jpg)

Researching the neighbourhood and the particular property you are interested in is a great step to take for choosing the right home. From geographic location, proximity to schools and amenities, neighbours, the type of roof, the length of the driveway to the quality of the tiling in the bathroom, the more you’re certain with what you want, the easier the process of buying a property will be. It’s important to find a home that not only suits your lifestyle, but fits within your budget. We suggest narrowing your search through the following options: 

###   __Suburb:__
  We highly recommend that you look for property that follows your lifestyle. For       example, if you have or are aiming for a stable career, prefer to live closer to     the city but unable to afford the property price tag, we suggest a home in the       urban precinct. If you have a large family with pets, a home in the outer suburbs     may better suit your requirements. 

###   __Amenities and schools:__
  Finding or purchasing a property close to schools, shopping districts, public           transport and food within a budget is not only convenient personally, but it can     also make selling the property easier if you wish to move in the near future. 

###   __Work:__
  We know the commute to work can be irritating and it isn’t just because of the       lengthy amount of time it takes to get from point A to B, there is also the cost of   travelling everyday. Considering commuting is an essential aspect a lot of people     miss. 

###   __Neighbourhood:__
  In your current neighbourhood, are the people friendly? Is it quiet enough for your   taste? No loitering teens? Is the community taken care of? It doesn’t hurt to read   the council website or speak to existing residences to get a sense of the suburb     character. 
  
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## 3. Budget and plan

![computer-finances](//images.contentful.com/o2gysnvd04sg/49UvbZvQROwoeUM0Mmm0iy/9d2239fea9a6ff6d035e6888adf0317b/computer-finances.jpg)

Step 2 and 3 really go hand in hand when it comes to purchasing a property. If you have found a property that suits your needs and lifestyle, it becomes time to step back and budget. Can you afford the properties with your current situation? As much as we want you to find your dream home, it’s wise to be realistic and set a reasonable budget for yourself. Speak to one of our Home Loan Specialists or a local real-estate agent to help you narrow down your choices. 

To make the transition from prospective property buyer to homeowner even smoother, it’s best to organise a small team of trusted professionals to assist in your purchase, budgeting or any unanswered questions along the way. We suggest the following:

###   __Free mortgage advice__ 
It is important that you find and speak to a Home Loan Specialist with significant experience in home loan advice. Our trained Lendi Home Loan Specialists can give you advice specific to your purchase needs. 

###   __Conveyancer (Solicitor)__
When you purchase a property or apply for a home loan, it’s important that it’sdone legally and safely. So we strongly suggest you hire your own solicitor to assist you in any legal work. This can include managing and reviewing the ownership   transfer before you sign it. 

###   __Accountant__
Not essential, but if you’re not the best at managing your finances, an accountant could be beneficial for you. Your accountant can assist you with any outstanding debt and structure your financials for you. 

###   __Buyer’s agent__
Useful if you’re an Australian or a non-resident living overseas and can’t physically see the property you wish to buy. A buyer’s agent will source a suitable property and negotiate prices with the real-estate agents on your behalf. Make sure your buyer agent is licensed to work in Australia and is available in the state you’re purchasing a property in. 
  
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## 4. Prepare and compare finances

![calculator-hand-glasses](//images.contentful.com/o2gysnvd04sg/364bcPMj6MY4CgEcGAgmew/3d81dbd55942cf349eedeb7672d0fcb7/calculator-hand-glasses.jpg)

So now, you’re positive about your chosen property. This is a great time to do any last minute preparations and getting your finances in check. There are a few things you need to consider and it’s important to not gloss over them. 

Going back and analysing your financial background might sound excessive, but it’s better to be safe than sorry. Any decision you make at this stage is final and we want you to be confident and educated in your choice of home loan. Important last minute checks include: 

### __ Estimate borrowing:__
  Roughly estimate how much you need to borrow overall. Double check with your Home     Loan Specialist to assist you in understanding your borrowing capacity and credit     history.

###   __Check your deposit:__
  Can you come up with the 20%? If not, you may have to pay LMI. There are many         online sites available to calculate the time it will take for you to save for your   deposit. 

###   __Understanding the home loan:__ 
  There are many types of home loans to choose from in Australia. Go back and 
  research whether the home loan you’re most interested in is suited to your 
  lifestyle and your home loan goal.

###   __Home loan costs: __
  
As stated in the preliminary lifestyle check, go back and review the upfront or ongoing costs that will go into your budget. Remember to list them all and make a few copies just in case. 

###   __Comparing current home loan rates:__
  You’ve identified the home loan you require. Now it’s time to research and compare   the different home loan products offered in Australia. Remember to consider and       compare interest rates, the loan to value ratio, the fees for applying and any       ongoing fees of all the home loan companies available in the country. Read more       about [interest rates](https://www.lendi.com.au/inspire/finance/your-simple-guide-to-interest-rates/). 

###   __Credit history:__ 
  Reviewing and providing your credit history is an important step in preparing to     buy a property, hence why we recommend you to be honest during the first stages of   the guideline. The credit rating is calculated on personal details, credit borrowed   and owed, types of credit and involvement with lenders and the length of credit       history. Your credit history is an indicator as to what type of borrower you will     be. Your credit can be made up of: 
  - Applications for credit 
  - Commercial accounts that may be open or overdue 
  - Any other loans 
  - Bankruptcy information 
  - Any involvement in court 

Before even applying for a home loan, it’s best for you to settle any existing debts you may have missed. You can improve your credit status by paying your bills on time, not over-applying to home loans, regularly checking your credit file, saving electronic or hard copies of every bill/purchase you’ve made in the past few years. Any documentation that can prove you are a reliable borrower will be extremely beneficial to you. 

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## 5. Applying for your home loan 

![couples-meeting](//images.contentful.com/o2gysnvd04sg/14h61vScv2EQ68U0WKmgoO/1904ab641a6768f5485376b9b8005b53/couples-meeting.jpg)

You’ve finally found your dream property. It’s time for the purchase process, which will go as follows: 

 1. Shop around for the best home loan deal  - You can quickly [compare hundreds of loans here](https://www.lendi.com.au/home-loans/search/). Your chosen lender will do a final review of all the steps you’ve taken and your credit history. Usually, an application will take a few days to process.

2. Receiving conditional approval: Go ahead and apply for your home loan. Lenders will assist with processes such as the value of the property and the application steps. 

3. Achieving unconditional approval: You’ve been given the all clear. Official acknowledgment by the lender of approval of the home loan. Finalisation usually takes to 4-7 business days.

4. Settlement day: This is the final piece of the puzzle. Once documents are signed on settlement day ownership is officially transferred. 

Buying a property and committing to a home loan is a big step in life. Being fully prepared and knowing everything you can before you jump into the process is important. Following these recommendations will leave you more confident as you embark on your property journey. 

To learn more about what happens after settlement, read our guide to [home loan repayments](https://www.lendi.com.au/guides/home-loan-repayment/).

## Looking for home loan advice?
Chat with a [Home Loan Specialist](https://www.lendi.com.au/)  on 1300 323 181 for free expert advice. 