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While buying a property is expensive and requires a lot of discipline with your money, it can be possible to be ready to buy in only a year. From saving to researching the market, we go through what you need to do to get your finances in order.

## How much can you afford to repay each month?
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Lendi compares home loans from over 30 major Australian lenders. [Find a rate in seconds](https://www.lendi.com.au/home-loans/search/).  

## Budget, budget, budget
![calculate-finances](//images.contentful.com/o2gysnvd04sg/wFSzRRAAfYEGSyIeQOU2s/6226df932298e48bc4e78ed79fbd76f5/calculate-finances.jpg)

Purchasing a property can be expensive and you will need to be financially prepared for this. A tight budget may come in handy, especially if you must save a lot in a short amount of time. 

Listing your monthly expenses will help you determine where you can cut costs to save. 

You should focus on buying only the essentials, such as groceries. You can save extra dollars by switching to cheaper brands. You should also avoid indulging in luxuries, impulse buys and non-essential purchases to help save your money as quickly as possible. This could include not holidaying, not buying coffee and bringing lunch from home to work everyday.

%%Wondering how much you could borrow?%%

## Calculate your deposit
![piggy-bank](//images.contentful.com/o2gysnvd04sg/3ptdmRITqE4I2wcgoEAcSW/65a9960a4bc837d2be9ff476056456c1/piggy-bank.jpg)

The next step is to focus on saving for a deposit on your property. 

Most lenders require a deposit of at least 10%, although you should aim for 20% or more if you want to avoid paying LMI (Lenders Mortgage Insurance). For example, if you want to purchase a property for $1.2m and you have a 10% deposit of $120 000 saved, you could be required to pay between $26,516 to $36,325 LMI in addition to your home loan. However, saving a 20% deposit of $240 000 will incur no LMI.

Having a larger deposit can help you to obtain a home loan quicker by proving to your lender that you are responsible with your money. It could also mean that you may be able to afford a more expensive property. However, do not buy a property you can’t afford because you  may not be able to pay back the loan and will risk losing your property.

A larger deposit can also reduce the amount that you need to borrow from your lender and can lessen your monthly repayments. 

%%Will you need to pay LMI?%%

## Save for the extra costs
![money-jar](//images.contentful.com/o2gysnvd04sg/Pd0CQHMoWykss8wses0uY/349a6333eeef159c7e5a341906b26cf1/money-jar.jpg)

It is important that you save enough money to cover yourself when buying a property so that you can also afford any hidden costs.

You should take out a savings account that your salary is paid into so that you are not tempted to spend this money elsewhere. Your savings account should have a good interest rate and pay interest frequently so that the interest will accumulate on itself and you will get a better return on your savings.

You should also have enough saved to cover any hidden costs such as stamp duty, property inspections and solicitor’s or conveyancing fees. 

If you are renting, you should consider moving back in with your family or house sitting to increase your savings. 

## Check your credit score
![invoices-paid](//images.contentful.com/o2gysnvd04sg/77WuKYaSrKcK8O4qOueE0k/810441048ba281f83c8c7b8b9bf38b3e/invoices-paid.jpg)

Reducing and paying off any debts that you have may help you put more money towards your property. 

This should also help improve your credit score. Lenders look for higher credit scores when giving home loans because it can prove that you will be reliable when it comes to paying back your home loan. 

Your credit score can be affected by factors such as staying in your job for at least a year, paying your bills on time and how many home loan applications you make - so make sure your record is up to scratch.

You should pay off your credit cards every month and consider reducing your credit limits. You should also pay off any car or student loans, although some lenders are more lenient when it comes to student loans. 

Don't let your credit score hold you back from your dream property. [Compare home loan rates in seconds](https://www.lendi.com.au/home-loans/search/new-home-loan/). 

## Consider government schemes
![parliament-house-canberra (2)](//images.contentful.com/o2gysnvd04sg/xfiIWN9c4gIYIqw02qowC/204e2dafb3dc162e7ef68bbc4b1a6967/parliament-house-canberra__2_.jpg)

State governments have introduced a number of schemes to assist first home buyers in purchasing a property. These schemes may be especially helpful if you have not been able to save as much money as you’d hoped within the year. They can also help you save more money even if you have enough funds. 

In New South Wales, the government offers the First Home Buyers Grant (New Homes) scheme, the First Home Buyers Assistance scheme and more to assist buyers. You should check the criteria to see which scheme you may be eligible for.

%%Calculate your monthly home loan repayments%%

## Choose the right home loan
![couple-sign-lease](//images.contentful.com/o2gysnvd04sg/2U26GZ6eP6Sci4QYaumyq6/84e9fe75c8ad6a13bd9ae06c25211638/couple-sign-lease.jpg)

Choosing a lender and a home loan package is an important part of the process. The easiest and fastest way to compare home loans from different lenders is to answer a few quick questions [here on Lendi](https://www.lendi.com.au/home-loans/search/) and then chat to a Home Loan Specialist who can help you choose right loan for your specific situation.

There are many different factors to consider when choosing a home loan. Always look at the interest rate to see if it is competitive, check the extra costs and if your lender will allow you to set up an offset account or make extra repayments.

Each lender offers different options, so you should choose one that suits your situation best. For example, if you do not have a high income, you can opt for interest only monthly repayments for a set period of time. You could also consider a redraw facility or offset account as a means of reducing the amount of interest you pay over the life of your loan.

%%How much can you save with an offset account?%%

## Do lots of market research
![woman-computer](//images.contentful.com/o2gysnvd04sg/408bhei54Qyq0kMYoiSCeU/1f618e37d96db558da1f0fe7b767ea32/woman-computer.jpg)

You should also look at properties on the market in areas that you are interested in buying in to get an idea of how much you need to save. You can enlist a real estate agent to help you do this. 

It is important to look at the features of different suburbs to determine which would be best for you. You should think of your property as an investment so that you will get the maximum benefits from it if you were ever to resell.

You should research features such as crime rates, zoning or rezoning and public amenities such as cafes, shops, public transport, restaurants, schools, parks and more. All of these factors contribute to the value of your property.

It is also important to compare different properties of the same type as this may help you determine which is the better deal. 

%%Have you checked interest rates lately?%%