Without getting a pre-approval from the bank first, you can easily miss out on securing a home.

what is a pre-approval?

• • Your loan has been pre-assessed by a bank.
• • The pre-approval is valid for 3 – 6 months.
• • You know your maximum purchase price.
• • You know that your personal situation meets their lending criteria.
• • The bank hasn’t yet confirmed that they’ll accept your property as security.
• • The pre-approval may be subject to you meeting particular conditions.
• • Not all pre-approvals can be relied upon.
• Banks and lenders offer a number of different types of pre-approvals.
• They range from a simple 2-minute online application, to a formal document, written and signed by you and the bank.

Why should you secure a formal pre-approval?

• Securing a formal pre-approval is the only way to make sure you can negotiate confidently with vendors, whether it’s at an auction or not.
• Without a signed letter, some sellers and real estate agents won’t accept your offer, as they can’t guarantee that you’ll get the necessary finance.
• Ironically, a pre-approval isn’t necessarily a guarantee of getting approved.

What does the approval process involve?

• • Complete and sign our short application form.
• • Provide evidence of your income, savings, and debts such as credit cards and other loans.
• • We’ll complete a preliminary assessment and recommend several suitable lenders and loans.
• • We’ll lodge your application with the lender that you’ve chosen.
• • The lender will complete an assessment of your situation and provide their pre-approval.
• Our brokers will know which banks and lenders actually assess the home loan application before they give you a pre-approval letter.

How can it help me?

• If you know approximately how much you can borrow, you can make sure you look within an affordable price range.
• Once you’ve found the right home, you can go ahead and make an offer or go to auction.You can be confident that you have the money to purchase.
• Furthermore, the closing period of your loan is shorter as you don’t have to wait for the bank to go through the entire loan application process. This not only means you can close on the property sooner but that the vendors are more likely to say yes. This is because you’re more likely to obtain finance quickly and the purchase process will be smoother.

What makes a good pre-approval?

• For a reliable pre-approval, you need it to be formal, written and signed by the lender.
• The lender will have assessed your loan application and checked off as many of the bank’s loan conditions as possible. The more conditions for your pre-approval, the more the bank has to check.
• They won’t approve your loan until they have done these checks!
• You should make sure:
• • The bank or lender accepted your loan application after assessing your financial situation. This is important!
• • There are less conditions to check off on your pre-approval. If there are things the bank has yet to confirm, ask them to confirm them first!
• • The pre-approval is for more than you intend to spend on a property. This means you don’t have to apply for a new pre-approval if you decide to increase your budget.

What should I avoid?

• Avoid non-formal, non-written applications. This includes fast “30 minutes-or-less” online applications or applications over-the-phone. These have far less guarantees and will come with many conditions that you must fulfill at a later date.
• Generally, these are used by the banks and lenders to produce sales not to offer reliable pre-approvals. Avoid lenders that won’t assess your loan application in the pre-approval process.
• Don’t forget, unless the lender gives you an unconditional approval, they are still under no obligation to loan you money.

Conditional approval vs final approval: what’s the difference?

• Unlike a conditional approval, a final or unconditional approval is given once all the banks loan conditions have been met. This is the final guarantee that you’ll receive finance for a property.
• A bank will only decline a final approval if they find a discrepancy that has been completely missed or they have reason to suspect something like fraud.
• Once you’ve won at auction or your offer has been accepted by private sellers, you may have a one to three week grace period to get your finances and deposit in order.

Fixed vs variable

• “Fixed or variable” is a question that we receive on an almost daily basis.
• There really isn’t a simple answer because nobody can predict the future of interest rates.
• Ultimately, you have to decide if it’s suitable for you choose fixed for variable based on your short-term and future plans.

What restrictions do fixed rate loans have?

• • Your extra repayments are limited; usually to no more than $10,000 p.a. before penalties apply.
• • You may not be allowed to link an offset account to your loan.
• • You may not be allowed to redraw any additional payments that you have already made.
• • You may have to pay significant exit fees (break fees) if you make extra repayments, refinance, change loan types, sell your property or pay off your loan.

What are break fees?

• If you make a large loan payment, switch back to a variable rate or close your loan account, then you may need to pay a fee to the bank for breaking out of the fixed rate contract. These fees are known as break fees, an early repayment adjustment or an economic cost.
• They can often split your loan into two loan accounts and then fix one of those accounts, this allows you to keep part of your loan variable so you can retain some flexibility.

How much should you fix?

• You should try to calculate how much you’re likely to pay off your home loan over the fixed rate term and then keep that portion of your loan variable. This allows you to make extra repayments on the variable rate portion without incurring any break fee penalties.
• It’s common for our customers to fix their entire loan if they are a property investor, as most of them do not make additional repayments on their home loan.
• However, if they are fixing the loan over their home, it’s more common for them to fix only a portion of their loan to allow them to continue to retain flexibility and to have an offset account linked to the variable rate portion.

Should you rate lock your loan?

• If you’re setting up a new loan or refinancing to another lender then you should consider rate locking your loan at the time of application. Otherwise, you’ll get the interest rate at the time of settlement and not the interest rate at the time you apply for the loan.
How does rate lock work?
• • Your interest rate is held for 60 – 90 days at the time you apply for your loan.
• • Depending on the lender, you may get a lower rate if interest rates fall.
• • You will not pay a higher rate if interest rates rise before your loan is advanced.
• • You will pay a once off fee of around 0.15% of the loan amount to lock in your rate.

Have you saved a deposit?

• Having a large enough deposit should be your first priority when setting out to buy your first home. The size of the deposit required will depend on the value of the property and the amount you are borrowing, otherwise known as the loan to value ratio (LVR).

• As a general rule, this is how much you will need to buy a house:

For an existing property:
• • 5%-20% deposit
• • 5.5% stamp duty or less
• • $1,500 conveyancer
• • $1,000 other costs

For a new property:
• • 5%-20% deposit
• • No stamp duty for dutiable value less then criteria
• • $1,500 conveyancer
• • $1,000 other costs
• • First Home Owners Grants may apply (some states only)

Bear in mind that this is only a guide and costs and grants may vary from state to state.
• Please use our home buying cost calculator to find out what grants and stamp duty exemptions you may be eligible for.
• Ultimately though, the more you can save for a deposit, the better!
• This helps reduce the amount you have to pay in Lenders Mortgage Insurance (LMI), a one-off fee that is charged when you borrow more than 80% LVR.
• You can find out how LVR affects your LMI premium by using our LMI Calculator.

Get pre-approved

• With the help of one of our mortgage brokers, you can work out which lenders you qualify with and which home loan is most suitable.
• We will collect your supporting documents, such as payslips and bank statements, before submitting your application to the bank that you have chosen.
• Some banks issue a pre-approval within a few hours, others can take up to a week. On the spot pre-approvals aren’t always reliable, so be careful! Ask your mortgage broker for an estimate of how long it will take your lender.
• If your situation is complex then you may need to provide further information or documents to the bank. This can delay the process by a few days, so it is important that you apply for pre-approval before you begin looking for a property.
• A pre-approval means that your home loan is basically approved subject to the bank accepting the property that you plan to buy.

Choosing a house

Does the property meet your needs?
• Congratulations, you’ve been pre-approved! Now is the time to start shopping.
• There are many things to consider when buying a house, the most important of which is figuring out what your expectations are.
• Are you a couple? Do you have children or are you planning to? Is it convenient to get to work? Is there public transport nearby?
• Although you’ll want a house to suit your lifestyle, it’s important to be open-minded as well. Consider homes that aren’t exactly what you’re looking for.
• There may be a slight renovation involved but ask yourself, is it worth the money you’ll save on the purchase price?
• Real estate agents can give you some great tips but the final decision in your hands. That means you’ll need to get out into the real world to get a proper feel for the property and its location.
• Some of our lenders can consider approving your loan up to 18 months before settlement which will reduce the risk of you being unable to complete the purchase. Most banks can only assess your loan up to 3 months before settlement.

Construction loans
• If you’re a first home buyer, you may be considering building a home. After all, it is a major milestone in your life so you want it to be unique.
• Whether you decide to buy land then build, or purchase a house and land package, you’ll need to apply for a construction loan.
• These types of loans can often be complex, with the property valued at each stage of the build and builders paid in instalments as construction progresses.
• Luckily, our specialist mortgage brokers are experts in construction loans.

Making an offer

• Agreeing to a price on a property can be a daunting challenge for some people but the key is to ask yourself some basic questions before you get to the negotiation stage.
• Find out why the seller (vendor) is selling the property in the first place. They may be under pressure to sell and, therefore, may be more willing to go lower on price.
• If a property has been on the market for around six to ten weeks then it is a good idea to make a low offer. Owners that have had their property on the market for more than six months usually have unrealistic price expectations and so will not accept a low offer.
• Negotiations can be quite difficult because usually you’ll be dealing with the real estate agent and not the vendor directly.
• The best strategy is to not appear to be too keen and to hint that you are in negotiations to buy another property. This is the same strategy that agents use on you when they say there is another interested buyer!
• Pick out the faults and anything else wrong with the property even if it really is your dream home.

How long is the cooling-off period?
• When you have had your offer accepted and your conveyancer and mortgage broker has given you the go ahead, you can then sign the contract of sale and pay a holding deposit.
• You then have a cooling off period in which you can still back out of the sale. Sales by auction do not have a cooling off period.
• In some states a cooling off period can also be in the form of a clause that allows you to cancel the contract if you cannot obtain formal approval for your loan. This is normally called a finance clause however it can go by other names.
• The cooling-off period for property sales varies across Australia but the legal standard for each is as follows:
• • NSW – 5 business days
• • VIC – 3 business days
• • QLD – 5 business days
• • TAS – No cooling-off period
• • SA – 2 business days
• • NT – 3 business days
• • WA – No cooling-off period
• Bear in mind though that these are the minimum rights and obligations you have as a consumer. Each state usually has its own industry standard.
• For example, NSW has a cooling-off period of five days but it’s best to negotiate 10 business days to allow for approval of your loan and/or giving the valuer time to access the property.

Pest, building & strata inspections
• You should complete your due diligence on a property during the cooling-off period. For an auction this should be completed the week before the auction.
• The main purpose of inspections is to ensure the house you are purchasing is sound. Your conveyancer can normally recommend a good building and pest inspector to check the property for you.

Should I go to an auction?
• Auctions can be a prime opportunity to land a great deal on a property. However they also have a risk to you as the buyer.
• The reason for this risk is that there is no cooling-off period. You are required to pay your deposit right away and cannot back out!
• We recommend that first home buyers and people with small deposits avoid auctions if possible.

Preparing for an auction
• If you haven’t prepared for the auction then you can’t bid! Organise the below points well in advance to avoid missing out:
• • It’s important that you speak with your conveyancer and mortgage broker to get their advice before going to an auction.
• • Decide on a maximum bid.
• • Get your solicitor or conveyancer review the contract of sale before the auction.
• • Complete your inspections (see above) a week before the auction.
• • If your bid is successful, you will be required to pay the deposit immediately to the agent.

Contract of Sale
• After you and the vendor agree on a price (or you win an auction), then you will need to sign the contract to purchase the property.
• The contract of sale includes such information as:
• • The sale price.
• • The details of the deposit.
• • The cooling-off period (if applicable).
• • The settlement date.
• • Any special conditions in the contract.
• The process varies from state to state so check with your conveyancer or solicitor for specific information.

Get formal approval

• The contract of sale only becomes binding once it is signed by both the seller and the purchaser.
• You need formal approval, which means the bank has accepted the property that you are buying as security for their loan and has confirmed that they are willing to advance you the loan funds.
• Until you have formal approval you don’t have any guarantees that the bank will give you a loan.
• For this reason auctions always carry an element of risk, if the bank doesn’t accept your property as security then you may lose your deposit.

Settlement

What type of ownership will you have?
• For couples, you will need to decide on the type of ownership for the property. This will be stipulated on the documents that your conveyancer gives to the state government to transfer the property into your names.
• There are three types of ownership:
• • Sole owner: You are the only owner of the property.
• • Joint tenants: Most married couples choose this option. You each own equal shares and if one owner passes away then the other automatically owns their share of the property, irrespective of any instructions in their will.
• • Tenants in common: Most friends or business partners choose this option. Ownership does not need to be in equal shares. There is no right of survivorship which means that if an owner passes away then their share of the property is transferred as per their will.
• You should discuss these options with your conveyancer or solicitor.

Time to sign the loan offer
• After formal approval, it will take around a week to receive the loan offer documents from the bank. The loan offer is the contract between you and the bank with details such as the loan amount, interest rate and repayments.
• Sometimes banks make errors in the loan offer which need to be fixed before the loan funds are advanced. The most common mistakes are the spelling of your names or the address of the property that you are buying. Less common mistakes include the interest rate discount or the fees applicable to your loan. If you notice a mistake then let your mortgage broker know right away.
• Make sure that you sign and return the loan offer promptly to avoid delays in your settlement! Although it normally takes a few days for the bank to process your loan offer when it is returned, during busy periods it can take up to a couple of weeks.
• You may need to include some additional documents with your loan offer such as evidence that you have insurance on the property. Please refer to the checklist in your loan offer for the full details and ensure everything is returned to the bank in one go.
• If you send some of these documents separately then it is very likely that the bank will lose some of your documents and settlement will be delayed.

Do I need insurance?
• Most lenders require the borrower to obtain a minimum amount of building insurance before going ahead with the settlement. They may also require you to include them on your policy as a mortgagee (lender).
• The requirements are different depending on the type of property that you are buying:
• • House: You need to obtain building insurance and provide evidence.
• • Unit/townhouse: The strata corporation insures the building so no evidence is required.
• • Vacant land: Insurance is not required.
• If the bank requires evidence of your insurance then you can ask your insurer for a certificate of currency to be emailed to you. Make sure that you have insured your property for the minimum amount and included your lender on the policy before you request a certificate of currency.

Apply for grants!
• Are you eligible for the First Home Owners Grant (FHOG)?
• There are a variety of different housing assistance programs available from each state. These come in the form of grants and stamp duty concessions.
• The eligibility for assistance varies significantly between each state. Grants are normally available if you are buying a new property, building a new home or buying in a regional area. In some states they are available for all property types.

Final check of the property

• In the days leading up to settlement you will need to complete your final checks to ensure that the property you agreed to buy is in the same condition as it was before.
• This final inspection can be booked in with the real estate agent. You should ensure that it has not been damaged, and all fixtures and fittings listed in the contract are intact. In some cases, a sneaky seller may try to take the carpet with them when they move out!

Settlement

There are only a few steps to go before you settle your first home! The settlement is when you become the owner of the property.We wouldn’t recommend a settlement period of less than 45 days as some banks may not be able to meet the deadline.

A few days before settlement your conveyancer will let you know if there is any shortfall in funds that you need to pay. You can then organise bank cheques for these amounts to be given to your conveyancer who will then take them to settlement.

On the settlement day there will be a meeting between conveyancers and banks acting for both you and the seller. The loan funds and any additional money you need to contribute will be handed over in return for the certificate of title and authority to release the current mortgage on the property.

Sound confusing? Don’t worry. You don’t even need to attend this meeting. Just let your conveyancer take care of it!

Your conveyancer will also authorise the real estate agent to release your deposit to the seller.

After settlement, you can pick up the keys to your new home. Congratulations!

Did you make a mistake on your FHOG?

• The First Home Owners Grant (FHOG) is a one-off grant payable to first-time buyers for the purchase or construction of a new home.
• Applicants have to meet particular eligibility criteria to obtain the grant and stamp duty concessions and it can be frustrating if you don’t quite meet the requirements.
• However, lying on your FHOG application or simply making a mistake is very often picked up by your state’s revenue office and, at worst, could see you face significant penalties.

Tips on completing your FHOG application

• Did you know that more than 80% of first home owners grant applications are lodged incorrectly the first time around?
• So, based on our experience, we’ve created a FHOG guide to help first home buyers complete an accurate application which will be approved quickly.
• If you do not complete the form correctly, delay sending in the form or do not provide the correct supporting documents then the settlement of your new home could be delayed!

Common cases of FHOG application fraud

• • People not declaring that their spouse has previously owned a home and/or making false claims about their de facto or marital status.
• • Identity fraud, specifically, people creating fake IDs to get multiple grants.
• • Renting out the property within the first 6-12 months (the time frame varies in each state) which breaches the requirement for the property to be your principle place of residence (PPR).
• • Purchasing the FHOG property in a child’s name, with the consideration for the property paid by the parents.
• • Renovating the FHOG property while using another residence to cook, shower, sleep and, otherwise, live.

What If I’m a sole owner buying with a partner?

• If you’re buying the property as a sole owner (sole ownership) but intend to live with a de facto partner or spouse who has received the FHOG in the past, your FHOG application will be knocked back.
• First-time buyers who falsify their applications tend to get caught out at some point, whether it’s opening a transaction account together, applying for Centrelink benefits or simply refinancing or topping up their home loan in the future.
• The state governments are getting better at auditing their grant programs and identifying these false details. It’s not worth it!

What if it’s my first home in a particular state?

• No, you’re not eligible for the first home owners grant if you or your partner have already owned a home in another state and received a grant.
• However, you may be eligible if you or your spouse or de facto partner have only had a relevant interest in any residential property in Australia on or after 1 July 2000 and you have not resided in that property for a continuous period of at least 6 months.

What are the consequences of lying?

• Each of the state governments have their own policies to deal with FHOG cheats.
• The best case scenario is that your application will be declined by your office of state revenue.
• However, bear in mind that this can slow down the loan settlement process if you subsequently need time to come up with a shortfall in your funds to complete the purchase.
• You could potentially miss out on buying your dream home if the vendor (property seller) decides that you’re taking too long to figure out your finance.

Will I be hit with a fine if I get caught?

• Over the years, states have cracked down on people making multiple FHOG applications or providing other false information or supporting documents.
• From 2012 to 2015 alone, the NSW government has reclaimed $5 million and the Victorian government has reclaimed $7.5 million.
• Even if you get away with it at the approval stage, there’s a big chance you’ll face huge fines after the grant is paid out.
• Some of these penalties include significant fines, criminal charges and even jail time under the First Home Owner Grant Act 2000(FHOG Act).

Case studies

Below are some of the true events where clients have tried to get away with misleading their state government.

Identity fraud
• A Victorian man was charged under the FHOG Act for giving false information in falsifying his identity to obtain a grant.
• The man pleaded guilty at his court hearing and was sentenced to pay a $2000 fine plus $68.10 in court costs.
• In another case, a NSW man was convicted under the Crimes Act, Oaths Act, First Home Owner Grant Act and Taxation Administration Act after he’d tried to get three separate first-homebuyers’ grants using separate identities.
• He was sentenced to nine months jail with a non-parole period of six months and was also fined $7,629.

Failure to disclose prior interest in property and receipt of a FHOG
• A woman was charged for deliberately providing deceptive information in obtaining a grant and bonus of $12,000.
• She falsely declared that her spouse had not received an earlier FHOG and provided misleading information that she had not resided in a property in which she and/or her spouse had a relevant interest.
• She had 12 other aliases but no previous convictions and pleaded guilty to two charges in the Magistrates Court.
• She was convicted and received a 12-month good behaviour bond on the condition that she repay $12,000 to the State Revenue Office (SRO) within 30 days as well as $674.51 in costs and disbursements.

What if I simply made a mistake on the application?

• In the entire application form, do not guess any questions!
• If you’re not sure about anything, then talk with your mortgage broker or your solicitor.
• If you make a mistake, cross it out neatly, write your correction next to that section, and then you and partner should initial the change.
• If you make a mistake on a QLD or VIC first home owners grant application, it’s best to print that particular page/s again.

Is it better to buy a home now or to save a larger deposit?

• By saving a 20% deposit, you can avoid paying Lenders Mortgage Insurance but by delaying your purchase you’ll pay more in rent. In the meantime, house prices may grow out of your reach.
• Find out which option is best for you using our simple calculator.

Tips for using this calculator

• Are the properties in your area increasing in value? The long term average growth for most capital city locations is around 8% per annum. Our calculator will use the average growth in your state over the last 25 or 50 years.
• Hover your mouse over the ‘?’ icons in our calculators to find out additional information about how to use the calculator.

When is it better to save rather than buy?

• You’ll find that in most cases, it makes more sense to buy now rather than to save a larger deposit. This is because the cost of LMI is typically much less than the growth rate of a property.
• However, if your local area isn’t increasing in value then there’s no harm in waiting. You can delay your purchase while you sure up your financial position. Just make sure you have a savings plan and stick to it!
• If the market is falling then of course, don’t buy! Waiting will obviously leave you in a better position but try not to listen to the media. Instead you can determine the market direction by looking at reliable sources such as RP Data, Residex and Australian Property Monitors (APM).
• Our mortgage brokers have a paid subscription to APM and if you’re one of our clients, we can provide you with free property reports and data. Please call us on 1300 965 688 or complete a free assessment form to find out more.

How can I find the lowest LMI premium?

Not every lender has the same LMI premium rates. We’ve created a mortgage insurance calculator which compares lenders and lets you know if you’re eligible for any LMI discounts/waivers.

Can I borrow 100% with no LMI?

• Yes, you can. However, you’ll need the support of your parents guaranteeing your loan. The lender will use your parents property as additional security for your loan so you won’t have to pay LMI.
• You can read more about this option on our guarantor mortgage page.

Apply for a home loan today

Speak to one our expert mortgage brokers on 1300 965 688 or complete a free assessment form to find out more.

Why do banks care about my living expenses?

• When banks assess your ability to borrow, one of the major factors they assess is your spending compared to income.
• Your living expenses are a good indication of your character as a potential borrower.
• Specifically, banks will identify regular necessary spending such as your bills and groceries compared to regular discretionary spending for items or activities that are not necessary on a day-to-day basis.
• For example, banks will raise red flags for regular spending at pubs and clubs or spending on luxury fashion items.
• In this way, they’re able to calculate your serviceability or borrowing power.
• The key to maximising your mortgage borrowing power is finding a lender that takes a common sense approach and recognises where you can easily reduce your discretionary spending in areas such as entertainment and dining out.
• Call us on 1300 965 688 or complete a free assessment form and we can help you build a strong home loan application.

How do banks calculate your living expenses?

• Lenders use a few different methods, including:
• • Using the Household Expenditure Method (HEM) based on your family size and income (Australian Bureau of Statistics data) because it is considered unreasonable for someone to spend less than HEM each month.
• • Asking you to self-assess your living expenses on your home loan application form.
• • Reviewing any bank account (cheque or savings accounts) or credit card statements they have access to in order to confirm your self assessment.
• • Either accepting or adjusting your stated expenses to match your bank account history.
• • Either using the higher of the above living expense assessment methods to calculate your living expenses.
• A lot has changed over the past couple of years, with some banks requiring you to estimate your spending in 12 or more living expense categories!

How will the living expenses calculator help me?

• Borrowers are required to manually work out their living expenses on a weekly or monthly basis when they complete their home loan application.
• You’ll still need to self-assess but the calculator will give you a fairly accurate indication of how your spending compares to the average monthly cost of living in Australia.
Are you spending more than the HEM?
• The calculator result should be used as a general guide only as your living expenses can vary significantly depending on how you choose to spend your money.
• It’s best to speak with a mortgage broker to discover whether there are lending options available to you.
• In some cases, it may be a matter of setting a 3-6 month plan of budgeting and cutting out necessary spending.
• Check out our prepare to buy program if you’re not quite ready for a home loan.

Tips for using the calculator

• The calculator takes all basic living expenses into account such as groceries, utilities, phone, public transport/car and entertainment.
• The cost of renting or mortgage repayments is calculated separately so you can replace the figure with your own estimate after you decide where you’d like to live.

What items are expensive in Australia?

• The cost of living in Australia is significantly higher than most countries, including other developed nationas like the UK and the US.
• In particular, you’ll find that the following items are much more expensive:
• • Housing (rent and house prices)
• • Alcohol
• • Tobacco
• • Petrol
• However, Australians tend to have a much higher income so it’s still possible to enjoy a good lifestyle.

Example of HEM living expenses measure

• The cost of living can vary signficant depending on the make up of your household.
• Below are some example results of the living expenses calculator which include the cost of monthly mortgage repayments based on average Australian house prices:
• • Living cost in Australia for one person: $2,835 per month
• • Average living expenses for a couple: $4,118 per month
• • Average monthly living expenses for a family of 4: $5,378
• Input your own details to find out how your living expenses really compare with the national average.

The most expensive cities in Australia

• The most expensive cities in Australia are Sydney and Melbourne.
• Perth and Canberra are also relatively expensive but it’s people living in the other capital cities such as Brisbane and Adelaide that have some of the lowest living expenses in Australia.
• An exception to this is if you live in a very remote area such as a mining town.
• You may find that your average cost of living is high due to the cost of bringing goods and services to your community.

Why do banks use the HEM?

• Under the National Consumer Credit Protection Act 2009, Australian banks must make allowances for living costs when they run borrowing power or serviceability assessments for applicants.
• The industry regulator, the Australian Prudential Regulation Authority (APRA), doesn’t provide specific dollar figures for banks to adhere to so for years they were using the Henderson Poverty Index or Henderson Poverty Line and added an allowance.
• In 2012, the Commonwealth Bank (CBA) switched to HEM and other banks followed.

Banks don’t just rely on the HEM

• Most Australian banks certainly rely on the HEM as a guide but they also use their own measures, such as adding an assessment rate or interest rate buffer.
• By assessing your borrowing capacity at a higher rate, they can determine whether you’ll still be in a comfortable financial position should interest rates rise.
Banks don’t publish these rates and HEM buffers.

Relying heavily on living expenses is not a perfect system

• When lenders ask you to estimate your living expenses, they take the higher of the HEM or your declared expenses.
• The problem with having a high income is that they’ll tend to scale back your living expenses to be appropriate for your income, reducing your borrowing power.
• If your declared living expenses are too low, you may get knocked back even though you may, in reality, be really good with your spending.

Want to know if you qualify for a home loan?

• We’re specialists in the lending policies of the major banks and many second-tier lenders.
• There are some lenders that take a more common sense approach to your spending, allowing you to maximise your borrowing power and get approved for the loan amount you need.
• Call us on 1300 965 688 or complete a free assessment form to speak with one of our mortgage brokers today.

What is a fast refinance?

• A fast refinance is a process that allows borrowers to refinance their loan to a new lender, without the chance for your existing bank to slow the process down.
• Your bank benefits each day that you keep your home loan with them. By delaying everyone who discharges a loan by a week or two they make significantly more in interest.
• With a fast refinance your old bank doesn’t get a chance to do hold things up. The new lender doesn’t ask them to provide the title of your property prior to advancing the funds; they simply deposit the funds directly into your old loan account and it is closed on the spot.
• In other words, once your loan has been approved and the loan offer signed and returned then your refinance is completed within just a few days.

Why choose a fast refinance?

• Refinancing with some lenders can be difficult.
• Your existing bank can delay the refinance which can stop you from purchasing another property or releasing equity in time for what you need it for.
• There are many benefits of a fast refinance:
• • No fees: Most lenders do not charge a fee for their fast refinance process.
• • Settle quickly: Once documents have been received and certified, you can have your fast refinance approved in a week. This means your loan would take three weeks from the time you apply to when it is advanced.
• • Save on interest: Refinancing to a new loan with lower interest rates will save you money.
• • No complex paperwork: Your new bank will contact your current bank and organize your new loan, taking care of most of the work for you!

How long will it take?

• This all depends on how fast you are with getting us your documents and how difficult your situation is.
• In most cases, it will take up to three weeks. This is shorter than other refinance loans that can take up to 1-2 months or more to be advanced.
• However, urgent loans with a fast refinance can be approved & settled by the banks in as little as two weeks.

Will I qualify for a rapid refinance loan?

• Some lenders have restrictions on the types of borrowers who can apply for this loan.
• To be eligible for a fast refi:
• • You cannot be borrowing for a property that is on Old System Title or Company Title.
• • Your current loan must be on either a variable rate, fixed rate (some restrictions apply) or line of credit (some restrictions apply).
• • The property that is security for the loan must not have any restrictions on it such as caveats.
• • You cannot have any existing debts linked to your loan i.e. a business loan secured by your property. These debts need to be repaid.
• • The amount that you are refinancing on your loan must meet the bank’s lending guidelines. Some small loan amounts will not be eligible to be refinanced under this product.

• Building a home is a complex process that involves multiple parties including builders, contractors, lenders, solicitors, accountants, quantity surveyors and the council.
• With so many people involved in the process, there’s always the possibility of a communication breakdown and things may go wrong.
• Getting approved for a building loan is half the battle with the majority of mortgage brokers and bank employees not understanding the process.

Accept the reality and set your expectations

• Each lender processes a loan in a particular manner. With a conventional loan, it’s often easy to have the loan submitted and approved in a timely manner.
• For a construction loan, this system is often poorly-designed and run by inexperienced staff within the banks.
• Loan documents are commonly lost and credit officers often lack communication skills, leading to misunderstandings and delays.
• Our job as your mortgage broker is to fix these issues as they arise and, where possible, prevent them from occurring in the first place.
• No matter which lender you apply with, you’ll need to have some patience!
• As a result, construction loans are often set-up with many errors. The loan amount may be incorrect or it may be delayed, due to constant amendments.

How do construction loans work?

• When you apply for a loan, the lender will need a copy of the building contract/tender and the plans.
• They’ll ask their valuer to estimate the on-completion value of the property and will assess your loan on the lesser of the land price plus the cost of construction or the on-completion value.
• If you’re building an investment property, some will even consider , future rental income which can greatly improve your borrowing power.
• Once your loan has been approved, the lender will issue a loan offer for you to sign and return, just like with any other home loan.
• When your builder is ready to begin receiving payments from the bank, he’ll need to provide additional documents, such as the final council-approved plans, building insurance and building permit.

How do you request that the bank pay your builder directly?

• • The builder will send you an invoice.
• • You’ll then complete and sign a drawdown request form (available from your lender).
• • Send the drawdown request form and the invoice to the construction department of your lender.
• • The lender may require a valuation to confirm the work that has been completed so far.
• • The funds will be advanced to your builder generally within five working days.
• • Repeat this process for each progress payment required by the builder.

Ensure each stage is complete before completing drawdown request

• At each stage of the build, it’s recommended that you have a walkthrough to ensure that the property is being built to specifications and to quality.
• You may want to consider hiring a building consultant so you can be sure that no corners have been cut.
• This is particularly at the practical completion stage or last drawdown: don’t sign off on the last drawdown until you’re satisfied.

How big of a deposit do I need?

• Most people go over budget!
• We recommend that you keep saving during the construction process and try to avoid any large expenses until construction is complete.
• As a general rule, we try to ensure that you get approval for a slightly higher loan amount. This is to ensure that there are plenty of funds available.
There’s nothing worse than running out of funds when your house is almost complete!
• This is because the lender can’t release funds outside of the specified construction drawdowns.

First Home Owners Grant

• The First Home Owners Grant (FHOG) is paid to the lender by the government when the first drawdown is made to the builder.
• This means that many people who were borrowing a high percentage of the property value may have enough funds to complete the project but may not have enough to settle on the purchase of the land.

We are construction loan specialists!

• Our mortgage brokers are specialists in construction loans.
• We can quickly work out which lenders can approve your loan.
• In addition to this, we can structure your loan in a way that ensures that your new home is built without the hassles.

How do they compare?

• If you need a home loan, there are three ways to go about it: apply with your bank directly, shop around for a deal yourself or get a mortgage broker to do it all for you.
• So, mortgage broker vs bank: which is the better option?

Isn’t it easier to go to my bank directly?

Not necessarily.
• A 2016 report from one of Australia’s major banks says that the most common reason that people chose a bank instead of choosing a mortgage broker was because they already had accounts with that bank.
• Convenience is the main reason why people go to a bank directly, but it doesn’t necessarily ensure that you’ll get a smooth loan application process. Banks are large companies and communication between departments is a big problem.

What can go wrong?

• • There can be delays with your property valuation.
• • The credit assessor can misinterpret your pay slips because they don’t understand your income.
• • The bank may question prior loans that you’ve applied for.
• • Your file can be handed over to someone else without clear communication.
• • They sometimes even lose entire mortgage applications!

How can a mortgage broker help?

They will collect your income evidence and the other documents you need to provide as part of your application and take care of the whole process from application to settlement.

This includes:

• • Communicating with credit officers to provide further evidence they may need to assess your application.
• • Liaising with valuers, your solicitor, your builder (for construction) and even real estate agents (if you’re buying an investment property or buying at auction) to ensure a smooth application process.
• • Being your one point of contact across the entire process and staying in contact at each stage of the process so you know what is going on.

Where great performing bank staff work together with mortgage brokers is when you as a borrower get the best of both worlds.

The funny thing is that these staff members tend to be promoted to management roles away from clients or they become incredible mortgage brokers themselves!

Do mortgage brokers get better deals?

• Mortgage brokers have strong negotiating power and can often get you lower interest rates than what your bank is offering you.
How?
• Banks will try and give you a good interest rate but they tend to only offer them to borrowers they consider low-risk such as those with a clear credit history, a good deposit and a stable income.
• It also helps if you’re an existing customer.
• Even then, it’s not necessarily the best discount you can qualify for when you consider that there are more than 40 lenders in Australia.
• Banks want broker business and they are willing to fight hard to get it because they know that we can simply apply with another lender.

Banks don’t reward loyalty

• The problem is that when it comes time to refinance, banks tend to forget about you.
• You’re paying too much if you’ve had your mortgage for at least 2 years and banks won’t pass on these rate cuts to you because they’re more concerned with getting new business.

Brokers give you more choice

• Banks can only offer you their own products and adhere to their own lending policies which means you’re potentially missing out on a home loan that is better suited to your needs.
• Let’s say, for example, that you apply for a loan with the Commonwealth Bank and you don’t quite fit their lending policy.
• The bank loan officer doesn’t necessarily know that you don’t quite qualify but they convince you to apply for the home loan anyway. Then again, they might know you don’t qualify at all!
• The staff member is pretty much hoping that the deal will go through which means a lot of Australians get declined and miss out on buying their dream home.
• A broker, on the other hand, has a panel of lenders and many products to choose from so they will only apply with a lender that will likely approve your loan.
• You’re saving time and hassle and can avoid getting unnecessary credit enquiries listed on your credit file when you apply for home loans that you don’t qualify for.

Brokers are credit experts

• Bank policy can be very black and white and bank staff don’t know this.
• They do not handle complex situations well and do not understand how to properly assess them.
• This can sometimes be the reason that it can take a long time to process your application and, in some instances, you’ll get declined for no good reason.
• Often, the difference between getting approved and declined comes down to the strengths that you’re able to highlight in your application.
• “Packaging” your application just right is where a mortgage broker really shines.
• They can identify policy exceptions and even negotiate policy exceptions with the credit officer assessing your application because of the strong relationships they have with the lender.
• Not all brokers are the same though so have a read of the ‘What Is A Mortgage Broker?‘ page for some tips on choosing the right broker.

A mortgage broker has to earn your trust

• For most Australians, there’s safety in applying with a bank that is “too big to fail” rather than a small business owner like a mortgage broker.
• You’re not quite sure whether they will be here one day and gone the next.
• The reality is that most banks will try to find a way to charge you as much interest as they can.
• Once people have worked with a mortgage broker, history and repeated surveys have shown that customers usually had a great experience and returned to a broker for their next home loan.
Not sure if you can trust a broker?
• All mortgage brokers must hold an Australian Credit Licence (ACL) or be a credit representative under a wholesaler licence.
• This means they must not provide a home loan recommendation that will leave you in a worse off position as per the National Consumer Credit Protection Act (NCCP Act)
• At the end of day, brokers rely on their reputation more than most lenders.

Isn’t it expensive to use a mortgage broker?

Actually, for most home loans, a mortgage broker is free!

Brokers are with you every step

Mortgage brokers are paid on a commission basis which means they’re invested in your application and will work hard to get you approved and provide you with an amazing service.

Have you:
• • Found a property and need to apply for a home loan?
• • Are you still looking but wanted to know if you qualify?
• • Have you been knocked back by a lender in the past?

A home loan deposit is not enough without genuine savings!

‘Genuine savings’ is a term used by lenders to define funds that a home loan applicant has saved themselves over time. In recent times, Australian lenders have required borrowers to save at least 5% of the purchase price of a property in a bank account in their name. However, lenders have different genuine savings requirements depending on the amount that you borrow.

• 80% of the property value: Genuine savings isn’t required.
• 85-90% of the property value: Genuine savings is no longer required.
• More than 90% of the property value: Most lenders require genuine savings.
• 95% of the property value: Almost all lenders require genuine savings.
• 100% of the property value: A couple of our lenders offer guarantor loans for 100% or more of the purchase without genuine savings.
• No genuine savings: We have access to several lenders that do not require genuine savings and can accept a borrowed deposit.

For lenders that don’t require genuine savings, you may even be able to borrow up to 100% of the purchase price if you have a guarantor. Please call us on 1300 965 688 or complete our free assessment form and one of our specialist mortgage brokers will let you know if you qualify for a loan.

What is classified as genuine savings?

What is and isn’t considered to be genuine savings is very complicated! In addition to this, each lender has their own genuine savings policies! You can use our genuine savings calculator to find out how much you need to prove in genuine savings. It can also tell you whether it will be accepted by the bank. The following types of savings are considered to be genuine savings if they add up to be more than 5% of the purchase price:

• Savings held or accumulated over 3 months.
• Term deposits held for 3 months.
• Shares or managed funds held for 3 months.
• Equity in real estate (varies depending on the lender).
• If you’ve been renting for the last 3 months then some exceptions may apply.
• Even salary sacrificing under the First Home Super Saver Scheme can be acceptable.

A few select banks will request a 6 months saving history instead of the normal 3 months required by other lenders. This determines which customers have received a deposit from another source and simply added to it over three months to make it look like genuine savings.

Examples of genuine savings

The following are examples of what most banks find acceptable when determining whether you have genuine savings or not:

• Savings held for over 3 months.
• Term deposit.
• Shares or managed funds.

How much do I need?

Lenders typically ask for a minimum of 5% of the purchase price for a home buyer and 10% of the purchase price for an investor. The rest of your deposit can come from anywhere you like. For example, if you were buying a home for $500,000, then you’d need $25,000 in genuine savings.

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What isn’t genuine savings?

Having money in your savings account isn’t enough! The banks want to see that you’ve planned and saved a deposit yourself because this shows to them that you’re likely to be a good borrower. The following doesn’t count towards genuine savings:

• Gifts
• Inheritance
• Savings plans
• Tax refund
• Lump sum deposits (proceeds from sale of property is an exception to this)
• Bonuses
• Selling your car or other assets
• First Home Owners Grant (FHOG)
• Funds held in a business account
• Any borrowed funds e.g. a personal loan
• Developer’s or builder’s rebates/incentives

There are actually many exceptions to the above, particularly if you’re renting. Give one of our mortgage brokers a call on 1300 965 688 or fill in our free assessment form and we can work out which lender you can qualify with.

Is a deposit paid to a builder genuine savings?

A deposit paid to a builder, developer or real estate agent is considered genuine savings by some lenders as long as the:

• Deposit has been held by the Builder, Developer or Real Estate Agent for more than 3 months.
• Deposit wasn’t borrowed and we can prove that it was in your bank account prior to you paying your deposit.

This is common for off the plan properties where you may have paid the deposit over a year ago but the lender will ask you to prove another 5% of the property value as genuine savings at settlement. Thankfully you can apply with a lender that has a more reasonable approach. Please call us on 1300 965 688 and one of our mortgage brokers will work out the best options for you.

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No genuine savings home loan

Lenders that don’t require genuine savings

No genuine savings home loans are available if you choose the right lender:

• You can borrow up to 95% of the property value.
• Interest rates are often the same as those for a regular loan.
• Ideally, you should have a good asset position, income and employment stability.
• You will still need a deposit, however it can come from almost any source.
• If you have no deposit at all then consider a guarantor loan.

There are other specific crtieria you need to meet so please check out the no genuine savings home loan page for more information. Please contact us on 1300 965 688 or complete our free assessment form to find out more. Some lenders specialize in non genuine savings home loans and we know who they are!

Rent as genuine savings

If you can prove a strong rental history, some lenders will make an exception to their normal genuine savings policy and may consider other deposit sources such as a gift from your parents.

Renting for 3 months or more

You generally need to meet the following criteria:

• You’re currently renting.
• Most lenders prefer a minimum of 12 months rental history but some lenders will consider 3 months of rent paid on time, every time.
• You can be renting privately or via a licensed property manager (private rentals are case by case).
• The tenants on the lease must be the same as the borrowers on the home loan application.

If you meet the above criteria, the rent that you paid over the last 3 months will be considered in lieu of genuine savings with one of our lenders. Any deposit source will be acceptable with one of our lenders. Please call us on 1300 965 688 to discuss your situation and we can you help confirm whether you’re eligible for a 95% home loan. We’ll need your property manager to complete a rental reference letter (we can provide the template) and/or a tenant ledger to assess your home loan.

Other no genuine savings options

The following deposit types can also be considered as genuine savings but you must be able to prove that your rental payments have been made on time for a minimum of three months:

• Gift: The gift must be in your account and a gift letter must be provided by your parents to confirm that the gift isn’t a loan.
• Bonus/Dividend/Commission payment: Provide a payslip evidencing payment and bank account statements.
• Inheritance: Provide a letter from the Executor confirming the amount and date that the funds will be received.
• Non-real estate asset sale: Provide evidence confirming the details of the asset that you sold. In most cases, this is from the sale of a motor vehicle.
• Tax Refunds: Provide a copy of your Notice of Assessment.

Is it really that easy for renters?

Not necessarily. Banks are stricter in their assessment if there isn’t standard genuine savings in a bank account.

• Only a select few banks make exceptions to genuine savings criteria for renters.
• The banks sometimes have very conservative credit scoring for renters.
• Most banks won’t accept a private lease or a leasing from a family member.
• Some banks will complete a ‘capacity test’ or will require that you have 1% to 2% genuine savings.
• Your rent may be considered as genuine savings, however you’ll still need to come up with a deposit in order to complete the purchase.

Our mortgage brokers are specialists in the genuine savings policies used by the banks and have access to home loans that don’t require any genuine savings at all!

Do I still need a deposit?

Yes, you’ll still be required to provide a deposit or what the banks call “funds to complete”. You’ll need to prove these funds at the time of your initial loan application. The amount required would ordinarily be a minimum of 5% of the purchase price (depending on the LVR of your loan). This percentage varies depending on the state in which you’re purchasing and whether or not you’re a first home buyer as grants and stamp duty exemptions need to be considered. If you don’t have a deposit but you have a guarantor, we can lend you the full purchase price plus costs!

What other restrictions apply?

In order to get approved with a lender that doesn’t require genuine savings, there are certain restrictions that may apply. If you have no genuine savings or you’re not sure, speak with us first before applying with a bank directly. Although some lenders specialise in no genuine savings, the tradeoff is that they tighten other lending rules. As a general rule:

• No genuine savings home loans are usually only available for buying a home, not for investment.
• Not available when purchasing vacant land or constructing.
• Max land size with most lenders is 2.2ha.
• Properties in small towns or remote areas may not be considered.
• Your ratio of your net disposable income to your total debts should be at least 110%.
• You’ll only be able to borrow up to 95% of the property value up to $650,000 as opposed to $1 million if you had genuine savings.

Don’t meet the above policy? Call us on 1300 965 688 as we may have other options available. Genuine savings policies are complicated and there is no one size fits-all solution.

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Why are genuine savings policies so strict?

Those that don’t work in the mortgage industry are often surprised at just how strict lenders are with their genuine savings policies. For example, if you wished to buy a property for $300,000 you may need to prove $15,000 (5%) in savings. If you only had $14,000 saved and the remaining $1,000 came from another source, then your loan will be automatically declined with some lenders. The reason they’re so strict with genuine savings is due to their Lenders Mortgage Insurance (LMI) providers. Loans that are for over 80% of the property value are insured by an external company. This reduces the risk to the lender in the event that you can’t repay the loan. If a lender has to make a claim on a mortgage insurance policy as a result of a customer not paying their loan, then the mortgage insurer will audit the original approval. If they see that the lender didn’t have evidence of exactly 5% or more in genuine savings when they approved your loan, then they won’t pay the insurance claim!

Example of non-genuine savings or irregular savings habits

The following are examples of savings evidence that may be seen as a red flag with most lenders. However, some lenders may still consider the following so speak to us first if you don’t think you quite meet standard genuine savings policy.

• Lump sum deposit: You’ll see in this document (circled in red) a lump sum deposit of $8,171.55 deposited on 30 June.
• Fluctuating savings: You’ll notice that this person’s spending habits are little out of control which is a sign that they may not be able to manage their mortgage repayments. Their savings balance isn’t really increasing and is being hindered by spending habits.
• Personal loan statement: Personal loans simply aren’t a good reflection of your character and capacity to save. Only a few lenders will accept this as your deposit.
• Gift held for 3 months: A gift from your parents is only acceptable if you’ve held it for at least 3 months and can provide an accompanying gift letter explaining that the funds won’t have to be paid back.
• Redraw facility: This is unacceptable as genuine savings.
• First Home Saver Account: Unfortunately, First Home Saver Accounts were abolished on 1 July 2015.

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Common Traps

Where did the deposit come from?

When you’re saving money to buy a home, it’s unlikely that you’re thinking about the lender’s policy and how you should structure your savings so it passes their test. Below are some examples of savings sources that may not be acceptable to the lender:

• First Home Owners Grant (FHOG): One of our lenders considers the government’s FHOG to be genuine savings. This is a unique policy that’s only available through one lender.
• Personal loan: If you apply for a personal loan and then put the funds into a bank account for three months, this won’t qualify as genuine savings. This will also lower your credit score.
• Gift held for three months: Holding a gift in a savings account is technically not considered to be genuine savings but we know lenders that will accept this even though you didn’t save it yourself!
• First Home Saver Accounts: FHSAs not only allow first home buyers to save but also provide for additional contributions to be made by the government. Some lenders won’t consider the government’s 17% contribution but others will.

Not sure whether or not your savings are “genuine”? Please fill in our free assessment form or call 1300 965 688 and one of our brokers will give you the answers you need.

Where are your savings held?

Did you know that a lot of people who have saved a deposit themselves still get declined? It’s usually because they don’t keep the savings in their own bank account.

• Savings in a friend/family members account: It’s common in Asian families for people to keep their savings in the account of a family member or friend. You can actually still borrow up to 90% with some lenders.
• Loan to a friend/family member: Most lenders don’t consider this to be genuine savings but we can help you to borrow up to 90% of the property value!
• Savings in an overseas account: Recent migrants to Australia, particularly those on a 457 visa, tend to keep some of their savings overseas. We know lenders that will allow you to borrow up to 90% of the property value using this as genuine savings.
• Savings in joint names: Some banks won’t consider savings held in a joint bank account in situations where one person is buying the property on their own. However, we have lenders that may allow you to borrow up to 90% of the property value.
• Savings transferred from another account: This is acceptable as long as the names of each account matches your name and your statements show that regular deposits have been constributed over a period of 3 months to the originating account.

There are other types of savings that may be accepted as genuine savings as long as you can provide a trail of documents showing where the funds originated. This includes:

• Savings held in a trust account
• Savings held in a company name
• Savings in the account of a marital partner (as long as they’re a co-borrower).
• Savings in the account of a de facto partner (as long as they’re a co-borrower).

Bank will analyse your savings

The bank is going to look through your savings and analyse the way that you’re managing your money.

• Savings not growing: Some lenders have a policy that only savings that are added to regularly are considered to be genuine savings. Having a lump sum in an account is not often accepted. However, we have lenders that can consider lump sums as long as they’ve been held for over 3 months.
• Lump sum deposits: People who receive commission income, bonuses or who have sold an asset such as a car often make their savings in irregular lump sum deposits. Unfortunately, lenders don’t view this as genuine savings because it doesn’t show that you have the ability to save on a regular basis. We have lenders that can consider this as genuine savings for a loan of up to 90% of the property value!
• Savings in redraw: Many people save by making extra repayments on a loan they have and then redraw these funds when they need to make a purchase. Whilst this is the most financially responsible way to save, many lenders don’t consider this to be genuine savings. We have lenders that will consider savings in a loan account!
• Your spending: Any transactions shown in your savings account will be checked against the information provided in your application. The bank is looking for undisclosed debts, other expenses or dependents.

Common deposit sources

More than 80% of first home buyers say that the biggest barrier to buying a first home is saving for a deposit. That’s according to Genworth’s March 2016 Sreets Ahead report which also found that more first home buyers than ever find it unreasonable to require a 20% deposit to buy a property. Since 2009, the proportion of first home buyers that have used savings as part of their deposit has decreased from 72% to 44%. Today, around 66% of first home buyers use sources other than their own savings. More often than not, these alternative deposit sources are gifts from parents and credit cards.

How do millenials spend their money?

Australians under the age of 30 are spending way before their means, a 2016 report by Veda Advantage (now acquired by Equifax) found. The credit reporting agency found the main reason for overspending was due to the fact that millennials are increasingly more comfortable with credit than the previous generation. In a similar report, JPMorgan defined millennials as being born between 1981 and 1997, while non-millennials are those born prior to 1981. It was found that millennials spend a lot more on “experiences” compared to non-millennials. For example, 16% of overall credit spending was spent on dining compared to 11% for non-millennials, and 12% on entertainment compared to 10% for non-millennials. Overall, 34% of millennials’ total credit spending was on experience items and services compared to 28% for non-millennials. This means less money is being put aside for saving or buying assets such as real estate.

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Essential tips for saving

• Write down your budget and get buy-in from your partner: In that way, you can support each other.
• Avoid emotional spending: A lot of us do it so replace it with an activity that doesn’t cost you anything.
• Write a weekly menu and stick to it: Sounds simply but you can save literally thousands of dollars a year.
• Freeze your leftovers: You can have them for lunch the next day.
• Ask for discounts on everything: If you’ve been a loyal customer to your phone company or even your bank, ask for a discount including your interest rate.
• Sell old items and clothing online: You may not use it anymore but that item collecting dust in your garage may worth something to someone else.
• Repair appliances instead buying brand new: It costs a lot less to keep things in working order than buying brand new appliances and machinery for the house.
• Cancel old credit cards and memberships: You can save hundreds every year and clean out your wallet in the process.

Of course, the best thing you can do is speak with a financial planner to work out the best savings and budgeting strategy for you.

Apply for a home loan

We have mortgage brokers with extensive experience in financing property purchases for people who don’t have genuine savings. We can tell you if your deposit will be considered as genuine savings, whether you can use your rental history or whether you can qualify for a loan without genuine savings. Please call us on 1300 965 688 or complete our free assessment form today!

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