How to get a loan

Without a loan, you cannot move forward with your dream of buying a home or investment property. Here is a step-by-step description of getting a loan to fund your property purchase.

  1. Set your budget
    You must be absolutely clear about how much you can afford to pay. Besides your income and expenses, keep future needs in mind to make an informed decision.
  2. Determine how much you may be able to borrow
    The amount you can borrow will vary from lender to lender. Use online calculators offered by lenders to estimate this amount. Keep in mind that the property price is not the only cost in consideration; factor in the bigger costs like stamp duty to calculate your total out-of-pocket costs.
  3. Research different home loans
    Consider important factors like interest rates and payment terms to find a loan product that meets your unique needs. Also check if you are eligible for First Home Owner Grant. Some of the documents you’ll need to provide when applying for a home loan are:

    • Most recent group certificate
    • Two most recent pay slips (personal and business tax returns from the previous two years for self-employed borrowers)
    • Identification documents equivalent to 100 points

    If you’re building a new home, you must provide:

    • A copy of the council-approved plans
    • A copy of the builder’s fixed price tender
  4. Find the right property
    A Professionals agent in your area can help you zero in on the perfect property. A home inspection should follow to ensure that you’re buying a quality property.
  5. Make an offer
    If your private sale offer is accepted, you’ll need to put down a 10 per cent deposit to your real estate agent who will hold it until the sale is finalized. The conveyancer representing each party will formally exchange contracts at this point. It gives you, the borrower, the legal right to proceed with the property purchase. If the property sale is occurring through an auction, avoid bidding over the maximum price limit you have set. Properties being auctioned have a reserve price, a minimum price that the owner is willing to accept for the property. Upon reaching the reserve price, the property is sold to the highest bidder.
  6. Conveyancing
    Conveyancing, which is the transfer of property title from the owner to the buyer (new owner) is the next step. A conveyancer can charge you a flat or sliding fee of up to $2,200, which includes title search, clearance certificate and building reports.
  7. Settlement
    This is the last leg of the process where you pay your cheque and receive the title of ownership. The change in ownership can be communicated to government departments by your conveyancer.

Please note this information is provided as a general guide only and you should make and rely on your own enquiries with your preferred home loan supplier.