How To Prepare For A Home Loan

A growing family, an investment purchase or a seachange - whatever the reason is, buying a new home is a big step in anyone's life. While the process can feel overwhelming, Community Bank Sarina Bendigo Bank can help you every step of the way. Knowing how to prepare for a home loan makes the process simple and straightforward.

The Community Bank Sarina team have shared their home loan tips so that you can avoid any unexpected roadblocks.

1. Know your spending habits: If you’re seriously thinking about home ownership, it’s important to take a step back and look at your current spending habits. This doesn’t mean you need to dramatically change the way you spend your money. But it might mean you need to exercise some caution with your purchases. You need to demonstrate that you’ll be able to meet your mortgage repayments and proving you can responsibly manage your money will certainly help.

2. Know your credit: Applying for a home loan will always trigger the bank’s lender to assess your credit file. In a way, your credit file is like a resumé and if it isn’t in the best shape, it can be improved. By consistently meeting your future obligations, such as paying bills on time, you’re likely to raise your credit score. It’s important to check your credit file regularly to make sure you’re not receiving any unfair or incorrect results.

3. Know what you can borrow: It’s also crucial to know what your potential “borrowing power” is. Borrowing power is a combination of your income, credit history, and your monthly living expenses like bills, groceries, clothes, subscriptions, healthcare etc. Remember to include all your regular payments, including direct debits that you might otherwise not give much thought to, such as streaming subscriptions, gym memberships, and insurance.

Pre-qualifying is a process that you can use to figure out how much you can borrow before you apply for a home loan. Pre-qualifying will give you a good idea on where you stand and will help you to narrow down which type of properties and suburbs might suit you best.

There’s a lot that goes into getting a home loan. While it can be incredibly rewarding, it can take time – that’s why it’s important to have support from a bank you can trust. For more helpful advice on home loans, follow Community Bank Sarina on Facebook at facebook.com/communitybanksarina.