For many lucky Australians, buying your first home can be a positive experience. But new research from St. George shows that the majority of applicants find the process emotionally draining.
St. George’s latest Home Buying Survey found that 1.1 million Aussies compared the feeling of hearing their loan application has been approved to winning the local meat tray raffle.
However, first home buyers stuck in limbo waiting to hear their loan is approved reported the experience as emotionally draining, with 51 per cent describing it as stressful, and 42 per cent as overwhelming.
For those waiting less than a week for loan approval, more than half felt anxious (58 per cent) stressed (55 per cent) and impatient (61 per cent).
But for those waiting at least seven weeks for approval, nearly all experienced anxiety (96 per cent), stress (94 per cent) and impatience (93 per cent).
There are a few things you can do as a would-be buyer to position yourself as more likely to be approved.
RateCity tips for first home buyers to avoid application anxiety:
- Start small. Don’t buy your dream home first up. If you can’t afford an apartment in the place you want to live, consider an investment property in a cheaper location.
- Take the time to save a decent deposit. It might take longer but you’ll be financially more attractive to a lender if you’ve got a decent amount of equity to put forward. Aim for a 20 per cent deposit.
- Ditch Uber Eats for home cooking. Lenders have been going through would-be buyers’ banking history with a fine-tooth comb and cracking down on discretionary spending. Try to avoid things like Afterpay or ordering takeout at least three months before you lodge your home loan application to position yourself as someone who can stick to a budget.
- Give yourself a generous buffer. Just because home loan rates are at record lows, doesn’t mean this will last the life of your loan. Factor in being able to afford mortgage repayments with a buffer of at least 2, if not 3 per cent and this will position you as a more reliable borrower to banks.
There are currently 40 home loan products on the RateCity database targeting first home buyers.