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Buying your own home is one of the most important financial decisions you'll ever make. Here are some important things to consider before applying for a home loan.

Start planning

Before you start looking for a property to buy, you need to get your finances in order.

Use our budget planner to work out if you can afford a home loan

Budget planner

Use our mortgage calculator to work out what repayments you can afford. Remember to add the extra costs like stamp duty, legal fees, lenders' mortgage insurance, land and water rates, home and contents insurance and repairs

Mortgage calculator

Save as much as you can

Finding smart ways to manage your money will help you save for a home. The bigger your deposit, the less you have to borrow, and the more you will save in interest. Also, the bigger your deposit is, the lower your loan to value ratio (LVR) will be.

This is the amount of the loan divided by the purchase price (or appraised value) of the property. If your LVR is over 80%, you will be charged lenders' mortgage insurance, and some lenders will even apply a higher interest rate to your loan. Saving a bigger deposit will help you avoid these extra costs.

If you are buying your first home, you may be eligible for the Australian Government's First Home Owner Grant

Choose your home loan

Video: Finding the right mortgage

Choosing the right home loan video

Shelley gives tips on how she and her husband found the right mortgage.

Transcript: Finding the right mortgage

Once you've sorted out your budget, it's time to look for a loan:

If you home loan provider is not an Authorised Deposit-taking Institution (ADI) such as a bank, building society or credit union, from 1 July 2013 the amount a credit provider is able to charge in fees and charges is capped (that is, limited to a maximum amount) at 48% annually (including all fees and charges).

Video: Scott Pape's buying your first home money challenge

Video about buying your first home.

Take Scott Pape's money challenge to help you to buy your first home.

Transcript: Scott Pape's buying your first home money challenge

Read the fine print

Don't get caught out by unexpected costs. 

Read the credit contract carefully and check the interest rates and fees.

Check your credit provider is licensed

All credit providers and credit assistance providers (such as brokers) must be licensed with ASIC or be an authorised representative of someone who is licensed.

Search ASIC's Professional Registers to check your credit provider or credit assistance provider is licensed or you can phone ASIC's Infoline on 1300 300 630.

For more information see consumer credit regulation.

Stay on top

Keep your repayments up to date and seek help if you start falling behind:

A home loan is a major financial decision, so don't rush into anything. Shop around when choosing a home loan and always review the contract closely before you sign up.


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Last updated: 10 Oct 2016