The first step is obtaining pre-approval from a lender. This involves providing your financial details, such as income, expenses, and credit history, for the lender to assess how much you can borrow. Pre-approval gives you a clear budget and strengthens your position when making an offer on a property.

Your borrowing capacity depends on several factors, including your income, current debts, credit score, and the value of the property you wish to buy. Lenders use these factors to determine how much you can afford to repay. Generally, lenders will allow you to borrow up to a certain percentage of the property’s value, often around 80-90%, with the rest covered by your deposit.

Lenders Mortgage Insurance (LMI) is insurance that protects the lender in case you default on your loan. It is typically required if your deposit is less than 20% of the property’s purchase price. LMI can be a one-off payment or added to your loan amount, but it does not protect you as the borrower.

The home loan approval process typically takes between 2 to 6 weeks, depending on the complexity of your application and the lender’s workload. The process includes verifying your financial details, conducting property valuations, and meeting any additional requirements set by the lender. Ensuring all your documents are complete and accurate can help speed up the process.