Home Loan: Check your Eligibility Benchmarks Before Applying

Looking into your financial health is crucial if you plan to buy your dream home in Australia. Once you decided to buy a home, the next would be checking your home loan eligibility. A person should think of ‘how much home loan do I qualify for’ before applying for the loan. Taking a loan to buy a home is certainly a challenge, and the applicant needs to successfully pass a number of stages to get its approval.

Get an Idea About Different Home Loan Choices

Finding a suitable lender with the lowest home loan interest rates can be a daunting task, and you have to sit down and check ‘how much home loan can I afford’ before applying for one. The interest rates certainly matter when you look for a good home loan to fulfill your dream. Since it is a long-term debt, small differences in interest might add up over time. These loans come with different choices and features, and get an idea about how many home loans can you have and their flexibility.

Different Types of Home Loans

A home could be under luxury items because of its price tag. But buying a home is not only a dream but a primary need for people. And a person who cannot pay the amount to buy a home at once can think of how much home loan can I get. Banks and lenders should consider your income and ability to repay the loan before they sanctioned it. Following are the main types of home loans in Australia:

  • Basic home loan
    These are low-interest rate and no-frills home loans with very few features. But they come with fees and can be restrictions. And this type of loan may not be suitable for those who want to make extra repayments.
  • Standard home loans
    This type of home loan offers more flexibility than basic home loans. And most of the time offers a perfect offset account. It gives you the flexibility to redraw the extra money you have paid.
  • Home loan package
    It is another type of home loan in Australia. You can get an interest rate discount on the standard loan in this package, which makes it cheaper than basic loans. It usually contains a credit card without any annual fee in addition to a free transaction account.

Know your Borrowing Power

Every citizen in Australia deserves to own their own home. But a person should check how much a home loan can borrow to buy their dream home. The lender should estimate loan serviceability to understand the repaying ability of the borrower. For this, they aggregate all your income sources and take out living expenses, the monthly repayment of mortgages, and other debts. The commitment of home loans may take years, and the lender should check your ability to handle the burden before approving the loan.

Home Loan Eligibility Benchmarks

Many people are confused about how many bank statements for a home loan need to submit for approval. And you need to furnish bank statements for at least six months for a home loan. The common home loan eligibility criteria that you need to be aware of are:

  • You must be eighteen years of age or above
  • Must be an Australian citizen or a permanent resident of the country
  • You must have a stable income/ employment and not be on probation, and you must have been working in the same company for at least two years.
  • Over the course of two years, you must not have more than three employers
  • Those who are self-employed should show proof of their tax returns for the last two financial years

Decide Your Budget and Prepare for the Costs

The first and most important thing to decide to purchase your home is working out the budget. Some people look for a home renovation loan while some other plans to purchase a property. Have a clear picture of your income and expenses, and make a budget based on that. Get an idea about how many home loans can one person have and work out your plan.
Turn your dream of buying a home into a reality

Most people do not know the eligibility to apply for a home loan and how many home loans are eligible for tax exemption. A home is certainly a big investment that you make in life, and each step towards it must be crucial. Consider the following steps to fulfill your dream of buying a home:
• Decide your budget
• Know how much home loan can I borrow
• Check the lowest home loan rates
• Choose the right home loan
• Get the approval for a loan
• Find the home and do its inspection
• Enquire about government grants
• Buy your dream home

Buying a home is certainly a great asset and achievement. But comparing different home loans, checking your home loan eligibility, getting approval, and doing all the legal work can be daunting. If you meet all the eligibility criteria and have the capacity to repay the amount in a timely fashion, go ahead and apply for a home loan to turn your dream of home buying into a reality.