5 Things First Home Buyers Need to Know Before Applying for a Loan

Buying your first home is one of the biggest financial decisions you'll ever make, and the lending process can feel like a maze. The good news is that a little preparation goes a long way.

Start with your deposit. Most lenders look for at least 5% genuine savings, though a larger deposit generally means better pricing and no lenders mortgage insurance once you reach 20%.

Next, tidy up your spending. Lenders review three to six months of transactions, so reducing discretionary spending and closing unused credit cards before applying can materially lift your borrowing power.

Understand the full cost of buying. Stamp duty, conveyancing, building and pest inspections, and moving costs all add up — and first home buyer concessions may apply depending on the purchase price.

Finally, get pre-approval before you start bidding. It tells you exactly what you can spend and shows agents you're a serious buyer.