What should you do before applying for a home loan

With over 100 lenders and thousands of home loan products available to Australians, how are you supposed to narrow down your options and pick the best one, let alone get it approved before the contract finance date?

Follow these five simple tips. It'll put you ahead of the game, streamline the process and increase your chances of success before you even start applying for a home loan.

1. Organise Your Finances

Buying a house takes money, so having your finances in order before you get a loan (or a house, of course) will offer you the best chances of success.

Work out what you can afford to pay, and subsequently, which properties are in your reach. If you need help crunching the numbers, free online tools like our borrowing capacity calculator can make things easier.

While you're at it, you need to be well aware of your own credit history. Any problems with it - such as bill defaults and even any prior loans or credit applications you've made - can have a bad effect on your application, so make sure you resolve any issues ahead of time.

You'll also need to have your deposit ready to go ahead of time. Generally, that means a 20% deposit on the purchase price of the property you want and any other upfront costs.

However, you'll also need solid evidence that you have been regularly saving money for at least three to six months in a row. Your savings account statement will come handy for this.

2. Check If You're Eligible for Repayment Help

There are governmental schemes to help eligible first home buyers make a property purchase.

There's the ongoing First Home Owners Grant which provides a lump sum of money towards their first home or first property to build a home on.

There's also the new 2020 First Home Loan Deposit Scheme which allows first home buyers to provide just a 5% deposit and helps lower interest on mortgage repayments. Checking if you qualify for either of these should be top of your list.

3. Do Your Research

Mortgages are very personal that you can't just go with the same one that your friends went with - even if they loved it - and expect it to necessarily work well for you too.

You need to know things like whether it's a 'Principal and Interest loan’ or ‘Interest-only loan', and the length of the loan terms on offer. You also need to compare interest rates and any mortgage features offered.

At loansHub, we provide you with all the resources needed during your home buying journey on our knowledge hub.

4. Ask for Help If You Need It

Having said that, it would be understandable to feel a little overwhelmed by it all, especially if home loans are completely outside the wheelhouse of your current knowledge.

That's where taking advantage of a mortgage platform like loansHub can be a huge advantage.

Not only are we able to help you compare home loans from over 40 different banks and assess which one might best suit your needs, but we can also help you identify any problems with your credit history and help you work to resolve them.

Not to mention it's actually a free service to you, as we're paid by the banks.

5. Have Your Paperwork Prepared

We've already mentioned the need to have proof of your savings plan, but you'll need a lot more paperwork prepared on top of that.

Things like proof of employment and any assets you may have, as well as evidence of any liabilities and expenses you regularly have to deal with. Of course, you'll also need photo ID, tax returns and recent payslips.

Gathering everything ahead of time will make the home loan application process that much smoother, and help avoid hold-ups due to accidentally leaving anything out.

Taking a little time to get prepared will put you ahead of the game for your home loan applications and get you into your new home much faster.

Enjoyed this article? Check if you Qualify for a mortgage with loansHub and discover how much you can save on your home and investment loans by using loansHub technology as your personal mortgage manager. To read more insightful articles, click here.

This article via lifehacker does not constitute financial advice; readers should seek independent and personalised counsel from a financial adviser that specialises in property or a tax accountant.