Buying a home is an exciting milestone, but it takes careful preparation to ensure you’re financially ready to take the next step. Whether you’re a first home buyer just getting onto the property ladder, or an existing homeowner looking to upgrade, getting your finances in order is essential for securing the right home loan and finding a property that fits your needs. Here are six steps to help you get home loan ready in 2025.

Step 1: Review Your Finances

Start with a closer look at your budget and a review of your current spending. Are you paying for things you no longer use – like online subscriptions or memberships? Are there spending areas you could cut back on and redirect towards a savings account? Are you struggling with high-interest debt or multiple repayments at different times of the month? A financial review could help you take stock of your current situation and help you plan for the future.

• Take stock of your income, expenses and savings.
• Create a budget to ensure you can manage future home loan repayments.
• Pay down outstanding debts like credit cards or personal loans to improve your financial position.

Step 2: Build Your Deposit

Saving a deposit is often the biggest hurdle for first home buyers, but with the right plan and expert guidance, it is achievable. Generally, a good savings target is 20% of the home’s purchase price, plus enough to cover extra costs like stamp duty and legal fees. Some lenders may lend to borrowers with a deposit as low as 5%, but that usually means stricter lending criteria or higher interest rates or having to pay Lenders Mortgage Insurance (LMI).

• Aim for at least a 20% deposit to avoid having to pay lenders mortgage insurance (LMI).
• Set up a dedicated savings account and automate payments into this account each month to grow your savings over time.
• Find out if you’re eligible for any government assistance such as the First Home Guarantee or Super Saver Scheme to further boost your deposit.

Step 3: Check Your Credit Score

If you’re getting ready to apply for a home loan, having a bad credit score could work against you. That’s why it’s so important to know what your credit score is and take the necessary steps to improve it. In Australia, you can request a copy of your credit report from major credit reporting agencies like Equifax, Experian and illion. 

• Review your credit report for errors and resolve them if necessary.
• Pay bills on time and avoid taking on new debt to maintain a strong credit score.

Step 4: Get Mortgage Pre-Approval

In Australia’s fast-paced property market, being able to move quickly when it comes to making an offer can be a significant advantage. Sometimes it’s the difference between securing your dream home and losing out! Getting mortgage pre-approval - a written commitment from a lender that confirms how much you can borrow based on your financial situation – helps you set a realistic budget for your property search and gives you confidence to find your dream home without the worry of uncertain financing.

• Speak with a mortgage broker to understand your borrowing capacity.
• Gather the necessary documents like proof of income, savings and ID.
• Pre-approval gives you a clear budget and shows sellers you're a serious buyer.

Step 5: Research the Market

To help you set realistic expectations about what your money can buy, research the local market, explore current market trends, and review average sale prices in the area you’re considering buying into. Working with a local real estate agent can provide you with helpful insights and help make the home buying process a lot simpler.

• Research property prices in your preferred areas to align expectations with your budget.
• Stay informed about interest rates and housing trends to make a smart purchase decision.
• Work with real estate professionals to find the right property for your needs.

Step 6: Get Expert Advice

Finally, having the right team on your side makes all the difference so set yourself up for success by working with a mortgage broker from Mortgage Express. Our experienced team of mortgage brokers can provide personalised mortgage advice, to help you navigate the home buying process and secure the most favourable loan terms for your new home loan. Contact Mortgage Express today to start your home buying journey and make your home loan work harder for you.

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.