Money & Living
A step-by-step guide to help you know what to expect after you've made the big decision to buy a home.
So you have your deposit and your wish list of suburbs, now comes the fun part... getting approved for a home loan!
Okay, okay. It may not be the funnest part, but it’s how most people achieve the dream of buying a home.
To make your life a little easier, we've broken it down into ten steps to help you better understand how it all works.
Step 1: Bank, broker, or other?
First you need to decide who you want your home loan with.
If you like to leave the running around to someone else, then find yourself a broker. They’ll liaise with several lenders to find competitive interest rates that best fit your needs.
Brokers work for commission, which they receive from lenders when your loan is approved, so make sure your broker is in it for you and has your best interests at heart.
If you prefer to use a bank or other lender, start shopping around.
Just remember, the lowest rate isn’t always what’s best for you so ask questions and know what’s on offer.
For example, an offset facility on a fixed or variable home loan, can make a big difference in how quickly you are able to pay off the debt and will likely mitigate the benefits of a percentage point difference here or there.
For more information on offsets and more, read: How to pay off your home sooner.
Step 2: Find out how much you may borrow
Use a borrowing calculator or pre-qualify for a home loan to get a good understanding of what you can likely afford.
And if you're serious and ready to start looking and making offers, it's time to get pre-approval in place with a lender.
Once you have pre-approval you'll be able to make offers and have confidence to negotiate on properties knowing that your lender is able to back you up to a certain amount.
To get pre-approved you’ll need to provide credit information such as pay slips, loan and credit card statements, and proof of savings.
The easiest way to do this is to come into a branch or book an appointment with a mobile lender. Or you can use our handy tool to pre-qualify for a home loan in minutes, online to kickstart the process.
Remember, pre-approval is not approval, but it does give you a pretty good idea of what you can borrow.
A lender will also be able to help you determine whether there are any applicable grants that you may be eligible for as well.
That said, it’s always good idea to know what government grants and schemes are available. Here’s a list of national and state-based incentives.
Step 3: Hit those opens!
You know where you want to buy, so speak to local real estate agents and get out and view properties.
Write down a 'needs' checklist, i.e. 3-4 bedrooms, near to public transport, off-street parking etc. and visit at different times of the day so you get a good feel for the surrounding area.
Step 4: Make your move
When the right house comes up, place your offer with confidence.
Know your stats, prepare to negotiate, and above all keep calm and composed.
It’s an exciting time, but it can also be stressful.
It’s probably worth being aware that a lot of things can happen at this time - outside of your control – which may mean that you are ultimately unable to purchase this particular property.
This can be extremely disappointing experience.
You may have already started decorating in your head and visualising your kids attending the local school. You wouldn’t be the first and you won’t be the last.
But remember to stay positive and stick to your budget.
The right property will come eventually.
It’s a big commitment buying a home. And the process itself can be a rollercoaster - the highs the lows and the many, many inspections - but when you do finally get the property you’re after, it will all be worthwhile.
Step 5: Congrats! Your offer is accepted
Your offer is accepted and (if applicable) you enter the cooling off period.
Now’s the time to get your ducks in a row.
Contact your lender and request formal approval for your loan.
Your lender might request a property valuation and you’re encouraged to book a building inspection during this time.
Step 6: Hire an expert to take care of the tricky bits
Conveyancers live and breathe real estate law, so although you ‘could’ do it alone, having a conveyancer in your corner will make the journey a whole lot easier.
They’ll check for unpaid rates or land tax owing, any unresolved property disputes, and search government records to ensure there are no planned developments or illegal building works.
They’ll also sort out your council and water rates, making sure you aren’t paying the previous owners’ bills.
Put simply, they ensure all legal obligations are met, and are responsible for protecting your rights during the property transaction.
Your selling agent, lender or broker can help you find a conveyancer, or you may want to find your own through word of mouth or a quick Google search.
Whoever you choose, make sure they are registered, licensed, and above all, experienced.
Step 7: You're homeward bound (almost)
The cooling off period ends, you have formal loan approval, and your purchase contract is signed.
You are now legally bound to buying your house.
Don’t panic! This is a quiet time for most.
You’re in the settlement period, which usually lasts between 45 and 60 days, and your conveyancer is working hard on your behalf to ensure things run smoothly during this time.
For peace of mind it may be worth checking in with your conveyancer, so you know how things are progressing. But beyond that, there’s not much else for you to do right now…
You might start mentally populating your new property or actually Marie Kondo-ing your possessions. This is a bit of a free period in your homebuying journey.
Step 8: Connect utilities and other bits and bobs
With the finish line is in sight, now’s a great time to contact the utility companies, insurance providers, post office, and any other business that needs to know your new address.
Organise for your power, gas, phone line and internet to be up and running as of your settlement date.
The last thing you want is to be spending the first night in your new home without water or electricity!
For some tips on everyday savings, read: How to make a budget (and stick to it)
Step 9: The final touches
Settlement day arrives, your loan draws down, and your agent hands over your keys.
Buy a new door mat, hang your favourite picture, and send out your housewarming invites.
You’ve worked hard for this moment, enjoy every minute!
Step 10: You've done it
You're officially a homeowner. Well done!
Now it's time to settle in, enjoy your new abode and make it your own.
Looking for more?
Let us help you start building a better future today.