You are ready to become a homeowner if you have the following things in place:
A substantial deposit
The bigger deposit the better when you’re saving for a home. A deposit of 20% of the purchase price plus enough to cover costs is ideal.
The bigger your deposit, the lower your loan to value ratio (LVR). This is the amount of the loan divided by the purchase price (or appraised value) of the property. If your LVR is higher than 80%, you will need to pay lender’s mortgage insurance, and the lender could charge you a higher interest rate. Avoid these extra costs by saving a bigger deposit to lower your LVR.
You should also think about how you will pay for other up-front costs like stamp duty and legal fees.
A regular savings habit
A history of regular savings in your bank account and a solid track record of employment will make it easier for you to get a home loan.
Pre-approval for a loan
Compare a few different loans before you decide. Ask your lender for a key facts sheet on each home loan so you can compare more easily. Once you choose the loan and have been pre-approved you’ll know what the repayments will be and how much you can afford to spend on a property.