• 4 signs you could be closer to buying a home than you think

    4 signs you could be closer to buying a home than you think

    Saving for a home is a pretty simple concept, right? It goes something like this; save, save, then save some more! But hold on … maybe you’re more ready than you realise?

    While building up a deposit is an absolute must, there’s a bunch of other factors lenders look at to decide if you’re mortgage-ready – and you might already tick some of those boxes. 

    Matthew Clark, a RAMS home loan specialist from Wollongong in New South Wales, explains why it’s not just about the deposit digits.

    Sign #1: You’ve got a good 9-5

    “First cab off the rank is stable employment,” Matthew says. 

    “Naturally, you need to be saving for a deposit if you want to buy your first home, but having a good, stable job, that you feel comfortable in, with good remuneration, is the base for everything else,” he says.

    For the vast majority, a full-time gig is how they’ll earn the cash to pay the loan back, after all.

    Matthew says lenders also understand that Gen Ys tend to “job hop”, so don’t be stressed about not having 10 years with one employer under your belt!

    Being self-employed doesn’t rule you out either. “With a permanent full-time job, it’s more straightforward, because your pay is set, but if you’re self-employed, it’ll require a bit more history about what you earn and getting advice early on is a good idea,” he says.

    4 signs you could be closer to buying a home than you think_Pic1 - drawings 
    A steady job doesn’t need to mean slaving away in an office, self-employed buyers get home loans too. Picture: Tamara Graham

    Sign #2: You’re smart about debt

    It goes without saying that the less debt you have, the better your chances of getting a mortgage. 

    “But let’s be realistic, at this stage of your life, you may well have other debts,” Matthew says. How you handle them as you prepare to buy a house is what matters.

    Paying off all debt – like car loans and credit cards – any which way you can, isn’t necessarily the best approach, he explains.

    “Don’t try to pre-empt what a lender might want or favour. Talk to someone who understands home loans, because it’s really a case-by-case thing.

    “If you have $20,000 left on a car loan, say, and someone gifts you that amount, it might not be the best idea to pay that all off. You might be better to add that $20,000 to your deposit, but it really depends,” Matthew says.

    “It’s best to lay it out on the table with someone who knows what they’re doing.” 

    4 signs you could be closer to buying a home than you think_Pic2 - wallet and keys 
    Honesty is the best policy when it comes to talking to professionals about your debts. Picture: Kate Hunter

    Sign #3: You’ve got a good rental history

    It may just seem like paperwork, but renters should get their name on rental agreements if possible.

    “It’s never a bad thing to be able to prove a strong rental history, as it shows you’ve paid rent regularly,” Matthew says.

    4 signs you could be closer to buying a home than you think_Pic3 - couple with records 
    Paying your rent on time will keep your housemates AND your lender happy. Picture: Kate Hunter

    Sign #4: You understand consistency is king!

    As well as being able to point to a big fat deposit, showing how you did it matters too, Matthew explains.

    “All savings are great, but being able to demonstrate you have consistently saved money, say weekly or monthly, on top of paying rent, is a good indicator to a lender that you can handle a mortgage,” he says.


    Originally published on flatmates.com.au


     

    About the author

    • Raymond

      Raymond A Ram is the RAMbassador for RAMS Financial Group. Raymond works with the RAMS team to bring simple, helpful and expert information on home loans and savings accounts to life with his down to earth and cheeky personality. He enjoys seeing everyday Australians turn their dreams of saving for a goal or getting into a home a reality. 

      Growing up in Goulburn, NSW, Raymond was brought up with good old-fashioned Aussie values of hard work and a fair go. It soon became apparent that Raymond wasn't content for the conventional path of grazing, producing the very best wool, and finding a nice sheep to settle down with. So it wasn't long before his passion for performing and his talent as a likeable larrikin shone through - landing him a few roles such as 'RAMlet'. He was even tipped to play RAM-bo at one point but chose to become star of the small screen instead as RAMbassador for RAMS. He now finds this role so much more rewarding.

      Contact your local RAMS Home Loan Centre about your home loan options.

      Raymond A Ram
     

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    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.

    The views and opinions expressed in this article are those of the author alone and do not necessarily represent the views or opinions of RAMS Financial Group Pty Ltd ABN 30 105 207 538 (RAMS),  Westpac Banking Corporation ABN 33 007 457 141 (Westpac) or their related bodies corporate. This article is strictly for information purposes only and neither RAMS, Westpac nor any of their related bodies corporate make any representation as to the accuracy or completeness of the information in this article or endorse the views expressed in it.