Advice For Securing A Home Loan When Young

For young Australians, owning a house or property increasingly seems like an elusive prospect. Soaring property prices and increasing living and rent costs can make saving for a deposit – and the ability to pay off a mortgage – seem impossible.

But young Australians can own property! Get your foot in the property door by making yourself eligible for a home loan. Here’s how:

- Start saving early! For any home loan, you’ll need a deposit. And the earlier you start saving, the quicker that nest-egg will grow. A good idea is to open a separate banking account and put money into it regularly each month. Let your money compound. If living in your parents’ house is an option, dedicate the money you would be paying on rent to your deposit account.

- Be informed. Where you want to live and in what type of property will determine the property price and deposit needed. Take time to research what area you would like to live in and can afford, and what costs you will be facing. Knowing the property market in an area well will make you an informed buyer and allow you to set realistic saving expectations. The property sections of newspapers and local real estate agents can give you information on the property market of your desired area.

- Have a good credit history. Good credit history is looked at favourably by banks and other lenders, and can significantly impact your eligibility for a home loan. To get good credit history, get a credit card and make sure you make your repayments on time. Get your phone and utility bills addressed to you, and have them – and your rent – on time. This will show a lender that you are reliable.

- Remember first home owner grants. Introduced in 2000, the First Home Owners Grant scheme was established by the Australian government to balance out the effect that the GST would have on Australian property ownership. While eligibility criteria and governing bodies differ between states, generally those who qualify are entitled to $7000 towards their first home. Keep this in mind and make sure you satisfy the eligibility criteria.

Taking these steps when young will increase your chances of securing that home loan you need to make your debut into the property market. Once you’ve made yourself into the perfect candidate for a home loan, you’ll need to compare home loans to make sure you secure the right one for you. Whether you choose to apply for an ANZ home loan or a Bankwest loan, for example, will rest on what loan terms and rates best suit you.