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Buying Tips

Everything You Need to Know About Applying for a Home Loan in 2023

Preparing to buy a house can be exciting, nerve-wracking, and sometimes both at the same time. To make the process smoother, you should ensure you are well-organised if you plan on purchasing a home in Western Australia in 2023. You stand a better chance of getting the property you want if you have completed the preliminary work ahead of time.

If you are considering purchasing real estate in Perth, you are in good company. The city’s homes are selling fast, often in as little as 12 days on the market. Many people are looking to buy a house in Perth and the capital city’s surrounding area.

There are several steps to take so you can quickly go through the loan process without any surprises or difficulties. It is worth noting that before you begin the process to secure a Perth home loan, take the time to ensure that you meet the general eligibility.

While each lender may have their specific loan eligibility requirements, you typically must meet these stipulations:

  • You must be at least 18 years old
  • You must be an Australian citizen or a permanent resident
  • If you are not an Australian citizen or permanent resident, you must be in a de facto relationship or married to an Australian citizen or permanent resident.

What You Should Do When Applying for a Home Loan

1. Get Your Documents Sorted

Your lending institution will need to review several documents to help them assess your creditworthiness after you apply. Arriving with the necessary papers neatly sorted helps make the process faster. The required documents include:

  • Personal Details – Your identification, such as a driver’s license, passport, or state-issued ID
  • Property Details – If you own property and earn income from it, provide a letter confirming your rental income, a copy of your current Residential Tenancy Agreement, and bank statements that indicate the rent payments
  • Proof of Income – Pay slips, bank statements or work contracts can prove income. Self-employed persons need to provide t two years’ worth of business and personal tax returns and Australian Tax Office (ATO) assessments. Remember to include dividends, superannuation, and all other income.
  • List of Assets and Liabilities – Assets include cars, share investments, term deposits, and anything you own of value. Liabilities such as credit card debt or ongoing loan payments.

Next, you can start the process of pre-qualifying for your loan. This is helpful because you will get an idea of the amount you may be able to borrow based on your income.

2. Selecting the Correct Loan

You need to look at different types of loans before deciding which loan to take. The two most frequently used home loans available that you may want to consider are:

  • Homeowners frequently use principal and interest loans. Borrowers will make repayments for a specific amount of time that will reduce the principal and interest.
  • Interest-only loans will put the repayment amount towards just the interest portion of the loan for a set amount of time, usually five years. During this time, the amount you borrowed will not decrease. Additionally, your repayment amount will increase once your repayment includes principal and interest.

Aim for the shortest repayment term you can afford. By doing this, you will pay off your loan faster and pay less interest over the life of the loan.

Often, the best course of action is working with an experienced agent, such as Zest Realty. The number of options available can be confusing and overwhelming to many potential borrowers. Professionals in the real estate world have an in-depth understanding and can offer solid advice based on their professional experiences.

A couple surrounded by boxes, just moved in to new home.

3. Original Deposits

An often challenging part of purchasing a home is saving for the deposit. Customarily, to avoid lender’s insurance, Australians need a 20 per cent deposit. This amount tends to be difficult to save even for the most conscientious potential homeowners. Other options to make the deposit smaller include finding someone who will guarantee the loan and applying for various grants available. Some significantly reduce the deposit amount.

4. Interest

Your interest rate will have a massive impact on your home repayments. While rates are no longer at the extremely low levels seen in the past few years, there are competitive rates available from various sources.

An important detail to remember when you are considering a lender and the interest rate involved is that you should see rates available at several lenders. The big four banks are not your only choice when it comes to financing. Because of this, you are not stuck without options.

You will want to find the best rate possible. However, be cautious when you see terrific introductory rates. Be sure you read all the fine print. You may be signing up for something you do not want. Carefully consider the details so you do not find yourself with a drastically higher rate and repayment amount down the line.

You should also carefully consider your interest rate and whether you want a fixed or variable rate. There are also loans available that are partially fixed and partly variable.

Navigating these aspects of your home loan is tricky business. This is why many people choose to work with agents who can decipher fine print and know a deal that is too good to be true when they see one.


Applying for your home loan is exciting. However, you may have quite a few questions or feel that you need more information. Whether it is your first home loan or you have purchased and sold several homes, our team of professionals at Zest Realty can answer your questions and help clarify any points about getting a home loan. We have years of experience assisting clients with all aspects of their journey to home ownership. To find out more about how Zest Realty can help you, do not hesitate to contact us.

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