Your income is one of the first and most important criteria lenders will look at. Besides assessing your ability to afford loan repayments, lenders will also consider your employment security and any apparent future risks, e.g. self-employment. Generally, the more stable your monthly income, the more likely your application will be approved.

Assets include: cars, properties, and shares. These are all proof to lenders that you can save money over time and make you more attractive as a borrower.

When assessing your ability to repay your mortgage, lenders will look at your living expenses and debts you’re still paying off.
Some of the most common debt types include:

• Personal loans
• Credit cards
• Afterpay and other “Buy Now Pay Later” services
• Existing mortgages
• Portfolio loans, or loans that provide the funds you need to buy shares and other investments
• Tax debt

Living expenses include: rent, groceries, utility bills, fuel for your car, streaming services, as well as day-to-day expenses like food shopping and dining out.

Your credit score is a number based on your credit report, which includes records on money you’ve borrowed, loans you’ve applied for, and whether you pay them back on time.

Your credit score will be between zero to 1,000 or 1,200. The higher your score, the more reliable you will look to lenders. A score of at least 670 and above is considered good.

Sometimes what you think a property is worth might not match up with what it’s actually worth in the market. To determine a home’s true value, lenders may conduct a property valuation. The outcome may impact whether or not you are approved to borrow a certain amount of money.

The amount of money you can borrow may be influenced by the term (length), interest rate, fees, repayments, and other features of the home loan you’re applying for. For instance, a loan with low fees and interest rate could mean lower repayments and therefore boost your borrowing power.

For most lenders, the more money you have saved for a home loan deposit, the more you’ll be able to borrow. Most lenders require a deposit of at least 5% – 20% of the total home loan amount.

At Easystart, we understand not all first home buyers will have a large amount of savings for a deposit. Learn more about our low deposit home loans here.