Preparing financially
Understand your financial position
An honest starting snapshot — income, essential expenses, debts, savings and planned life changes — before you set a target price or a safe budget.
- Use your actual take-home income and real expenses, not a lender's standard benchmark or your gross salary — the two rarely match exactly.
- List every existing debt against its full limit (not just its balance), and check your own credit report early enough to fix any errors before you apply.
- Distinguish genuine, longer-held savings from a recent lump sum — lenders often treat the two differently.
- This snapshot is what makes every later step — safe budget, deposit target, pre-approval — meaningful, rather than working backwards from a lender's maximum.
Before you set a target price or start inspecting, get an honest snapshot of where you actually stand today. Everything later in this framework — your safe budget, your deposit target, how much cash you need at settlement — is only as reliable as this starting picture.
Income and essential expenses
Write down your actual take-home (after-tax) income, not a gross figure — lenders assess what you can genuinely repay, not what you earn on paper. Alongside it, list essential expenses (housing, utilities, groceries, insurance, transport, minimum debt repayments, childcare or school costs) separately from discretionary spending. A lender's expense benchmark won't match your household's actual numbers exactly, so knowing your real figures — not an estimate — is what lets you judge whether a lender's assessment feels realistic for you.
Existing debts and credit history
List every existing debt — credit cards, personal loans, car finance, buy-now-pay-later, HELP/HECS balances — with its balance, minimum repayment and (for credit cards) its full limit, since lenders generally assess against the full limit, not your current balance. Check your own credit report early, well before you apply, so you have time to identify and correct any errors.
Savings and asset position
Note your total savings, where they're held, and how much has built up genuinely over time versus arrived recently (many lenders treat "genuine savings" — held for a minimum period — differently from a lump sum that just landed in your account). Include any other assets you might draw on, and any planned gifts or family support, since these affect both your deposit and how a lender assesses your application.
Planned life changes
Note anything reasonably likely in the next 1-3 years that could change your income or expenses — a career change, parental leave, study, a household change, or a planned large purchase. These belong in your own judgement about what's comfortable, even where a lender's assessment doesn't account for them.
The full eight-step framework
Once you have this snapshot, work through the remaining seven steps in order:
- Understand your financial position
- Establish a safe purchase range
- Build and structure your deposit
- Calculate complete buying costs
- Understand government support
- Understand and compare home loans
- Prepare for pre-approval
- Build financial resilience for ownership
Practical checklist
Before you start
- Write down your actual take-home income and essential expenses
- List every existing debt with its balance, limit and minimum repayment
- Check your own credit report for errors
- Note your savings, other assets, and any planned family support
- Note any planned life changes in the next 1-3 years
Questions for a professional
- Based on my actual expenses (not a lender's standard benchmark), what repayment would you consider comfortable for my household?
- What information will you need from me to assess my application?