If you’re looking to buy your first home, don’t wait until you start looking to think about finance. Just like painting, preparation is the key to getting the best results. The more work you can do ahead of applying for a loan, the better your chance of being accepted. It also might mean you can borrow more than you thought.
Here are four things you can do to give yourself a better chance of getting a home loan.

1. Close any credit cards or buy-now pay-later (BNPL) accounts you have. The more credit you can access, the less the banks will lend you for a home loan. It doesn’t matter if you use the credit cards or not, banks look at them as if you MIGHT use them. They assess repayments on if you borrowed the maximum amount, not how much you actually borrow. If you still need a card for emergencies, reduce the limit to the lowest possible amount.
2. Pay all your bills on time. You might think the money is better in your account rather than the phone company’s until the last possible moment, but any missed payments or defaults will show up on your credit file and could result in some lenders refusing your application. Having the money but just forgetting isn’t a great excuse, so consider setting up direct debits to ensure the bills are paid before the due date. Having a $2000 limit on a BNPL facility you don’t use could add $500 a week to your expenses, which could be the difference between getting your home loan approved or being rejected.
3. Audit the money you actually spend each month. Just because you tell the bank you will stop eating out 3-4 times a week once you have a home loan, doesn’t mean you will. Or that the bank will believe you. Many banks will give you a breakdown of your monthly expenses into categories, so it’s easy to see the areas you can save. You might be surprised how much you spend on buying lunches, or betting on the footy. Can you do without Uber Eats for a while, or four pay-TV subscriptions? When considering a home loan application, many lenders want to see your previous three-month spending history. You also need to be sure you can afford your loan repayments AND all your monthly expenses. Getting into good spending habits before you buy a house will make it easier for you once you start having to repay the loan.
4. Talk to a broker. Because they have access to dozens of lenders, they will know which lender is the right one for you and your circumstances. They are also up to date with the ever-changing landscape around Government grants and assistance for first home buyers. They will know if you may be eligible for support or funding that could get you into your house sooner.