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2022 is going to be just as unpredictable as 2021. Our advice? There’s nothing wrong with staying on top of the property and home loan media trends, but don’t let them consume you.

Below are just a few points on how you can prepare yourself for your next home purchase in 2022, and be very honest, every other year. They may seem simple and straightforward, but following through will definitely assist you in your home loan pre-approval process.

Make sure your finances are in place

We can’t stress the importance of a good credit score. The higher your credit score rating, the better your chances of getting loan approval. We also recommend paying any outstanding debts and bills.

Be clear on your property purchase purpose

There is a difference between the interest rates and loan features of an owner-occupied home loan and that of purchasing a property for investment purposes. Lenders typically charge a higher interest rate for investment properties because they are considered higher risk.

Know what you can afford

The amount you save on your deposit will determine the amount you can borrow and spend on a home. We advise our clients to save 20% of the property price to avoid lenders’ mortgage insurance (LMI). Be confident with the type of property you want – whether a house or apartment and have a clear understanding of the standard price of that particular property type you are after in the area you’re looking to purchase.

Map out all costs involved

There is more to a home loan than just the deposit. Your savings need to consider all costs involved. Upfront fees include application fees, property valuation fees, conveyancing fees, government charges, legal fees, mortgage registration fees, and more. Ongoing costs include monthly service fees and annual lender’s home loan fees.

Think outside the box for first home buyers

2022 will continue to be a tough year for First Home Buyers. Ever since APRA (Australia Prudential Regulation Authority) tightened its regulations on banks and lenders by announcing that it would increase its “serviceability buffer” for a new mortgage from 2.5% to 3% in late 2021, there has been a noticeable decline in first-home buyers entering the market.

Our advice in 2022? Reconsider what you’re looking for (maybe a smaller property or in a less expensive location), pay LMI if you are finding it hard to save for that 20% deposit, and keep an eye out on the First Home Loan Deposit Scheme and New Home Guarantee scheme.

There’s plenty more we can share with you! Best to contact us directly so we can organise a complimentary online consultation to discuss your property goals in 2022 and beyond.