One of the first questions that potential first home buyers ask themselves is whether they will be able to afford a home loan.
It's a pretty important one to answer!
It is one thing to secure home loan approval in the first place, but then you need to be able to meet your repayments over the length of your loan term, and preferably with some money spare for groceries, bills, repairs, and date night dinners!
Save a deposit
Are you a good saver? Do you think you can exercise financial discipline?
You'll need both of these qualities when living with a home loan, but also when saving up for a home loan deposit.
It can take months – or years – to save a mortgage deposit, so this is a great opportunity to cultivate the budgetary and fiscal discipline that will put you in such good stead for life with a home loan.
Do a practice run
Ready to find out whether you are truly ready for the financial demands of paying off a home loan? It's time to do a practice run!
Use a how much can I borrow online calculator to find out how much you could hypothetically borrow from a lender.
Then work out what your loan repayments would be under a realistic scenario.
Now, set up a separate savings account and start depositing the difference between your current rental (or other accommodation) expenses and your hypothetical mortgage repayments.
Do this for a few months. Are you able to comfortably afford bills and other week-to-week expenses without that extra money you are putting aside?
If so, you may well be able to afford a mortgage.
Speak to an expert
Why not get an independent opinion on your ability to live with a home loan?
A mortgage adviser can sit down with you and help you find a home finance solution that you will be able to comfortably afford.
You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.