Budget considerations

Before providing you a loan, most banks and lenders need you to pay a portion of your new home’s cost as a deposit. The amount required will be formed once the lender has reviewed your financial profile, equity from any existing properties you may own, how the market’s going and their own internal criteria.  

When obtaining a home loan, here are some important points to factor in:  

• Be gainfully employed.
• Demonstrate a strong savings or repayment history.
• Ensure your credit rating is as sparkling as can be.
• Consider removing any unnecessary financial commitments, like pay later services.  
• Show that you have a financial safety net, ie. a 'rainy day' fund. 
• Avoid applying to too many lenders at once and make sure you’re disclosing everything you need to as part of the process. 

There are a number of federal and state government initiatives that can help ease you into your new home.  

To help you get started, we’ve summarised some of the key government initiatives available for you to explore at a federal level, as well as state offerings across NSW, Queensland, Victoria and WA. 

Budgeting is fundamental to purchasing a new home, so it needs to be carefully considered and robust. 

There are five essential steps to take that are common to every well-planned budget: 

• Make a list of how much you’re earning and the frequency of your income.
• Add up every expense you can think of – from utility bills to groceries, entertainment, transport and beyond.  
• Considering the above two points, determine how much can you save whilst maintaining a standard of living you are comfortable with. Work this out and then set yourself a hard spending limit.
• Finally: Set yourself a regular review period to track and reconcile your budget vs your spending. Monthly check-ins are ideal.  

These days, there are many online tools available to help you get ahead with your budget planning and tracking. Your bank may even have an app-based solution to help get you underway. So, you may want to explore the options available and pick the one that best suits you.  

You may or may not need to obtain a new home loan, depending on your circumstances. If you’re buying before you sell your current home, you may need to consider a bridging loan (a short-term loan designed to cover the purchase price of a second home to give you time to sell your existing property). A broker or financial advisor will be able to evaluate your individual circumstances and provide options for your consideration.