Top 10 tips for taking out a home loan

Taking out a home loan will be one of the biggest financial decisions you make in your life one which you should always approach with caution and ensure you are well informed. 

The following is ten key points you should take into consideration when looking to borrow for your new home:


1. Set a budget – Before you start looking for a property, figure out how much you can borrow and comfortably afford.

2. Establish the Costs Involved – Make sure you budget for all the costs involved. It is not just about borrowing the price of the house. There will be solicitor fees, home and contents insurance and stamp duty not to forget moving costs.

3. Research availability of Government Assistance Packages – Take advantage of the First Home Owners Grants and Stamp Duty assistance if you are eligible.

4. Save for your Deposit – Once you have established your budget you will need to have at a minimum 5% of the purchase price saved and preferably all known legal and Government charges. A really healthy deposit to aim for is about 20% of the purchase price, however lower deposits are acceptable but that will mean additional costs for mortgage insurance.

5. Prepare your paperwork – You need quite a bit of information in order for your loan to be approved. At a minimum we will require, pay slips, a list of your assets, loans and credit cards, details of monthly expenses and identification.

6. What type of product best suits you – Decide on what sort of loan you would like, fixed or variable or a mix.

7. Seek Pre Approval – Speak with us to obtain an indicative ‘pre approval’ prior looking at the Market.  Having Illawarra Home Loans pre approve your request whilst does not guarantee formal approval it will afford you the confidence that your budget and your financial position will be acceptable to our lenders.

8.  Remain Flexible – Be open to changing your plans. Things change and it’s important that you don’t feel locked into what you agree to in the first instance. You might find a home in a different price range, want to fix more of your loan, miss out at auction or your budget might change.

9. Before you commit – Once you have found your new property and agreed to a purchase price it is vitally important that you obtain formal approval from us prior to exchanging contracts and making a deposit. One of the biggest pitfalls in buying a property is failing to complete the purchase after exchanging contracts which can and often will see you forfeit your deposit.

10. Be financially smart – Once you’re in your new home, set your sights on paying off your home loan quicker. There are simple techniques such as making more frequent payments (e.g. fortnightly rather than monthly) and using an offset account for day-to-day use and savings to reduce your interest. These can save you thousands of dollars over the life of your loan.


Should you wish to discuss your own financial situation in relation to your current home loan or future purchase please feel free to call me.

Craig Mason 

Mobile – 0414 913 215

Office – 02 4226 9977



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About Martin Anstee

Martin is the Managing Director and co-founder of Illawarra Home Loans.

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