Applying for a home loan is a big step, and it’s completely normal to have plenty of questions before diving in. At Avyza, we believe an informed client is a confident client, so here are the top 5 questions we hear most often before people apply for a loan, along with clear answers to help you get started.
How much can I borrow?
This is usually the first question on everyone’s mind. The amount you can borrow depends on factors like your income, expenses, debts, credit history, and deposit size.
Tip: Getting a professional assessment can give you an accurate borrowing power estimate before you start house hunting.
What type of loan should I get?
There are many loan types—fixed, variable, interest-only, split loans—and each has its pros and cons depending on your situation.
Tip: Your choice should align with your financial goals, risk tolerance, and how long you plan to stay in the property.
How much deposit do I need?
While the “ideal” is often 20% to avoid Lenders Mortgage Insurance (LMI), many lenders accept smaller deposits, sometimes as low as 5%. Government schemes may also assist first-home buyers.
If you’re already a property owner, you may not need a cash deposit at all — instead, you could use the equity in your existing property. This could not only cover the deposit but also help you reduce or avoid some lender fees.
What other costs should I prepare for besides the deposit?
This is a big one — and often overlooked! Beyond your deposit, there are several upfront costs you should plan for:
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- Stamp Duty – A government tax based on your property’s value and location. (Some buyers may be eligible for exemptions or concessions.)
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- Land Transfer Fees – Another government charge applied when property ownership changes.
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- Lender Fees – These can include application fees, settlement fees, and valuation charges.
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- Legal Fees – You’ll need a conveyancer or solicitor to handle the legal side of your purchase.
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- Moving Costs – Removalists, cleaning, or setting up utilities all add up!
How long does the loan approval process take?
Approval times vary but generally range from a few days to a few weeks, depending on lender requirements and complexity. Getting your documents ready and working with a broker can speed things up.
