Home loan approval is one of the most important steps when buying your first home, but before you can move in, you need to know if you’re eligible. Understanding what lenders check can help you prepare and improve your chances of getting approved.

What is a Home Loan and Why Does Eligibility Matter?
Home loan allows you to borrow money from a lender or bank to buy a house, using the property as security. Whether you qualify depends on your financial and personal situation. Lenders need to be sure you can repay the loan on time.

What Do Lenders Look For When You Apply?
Lenders check a few key things before approving your home loan application.
Your Income and Job Stability
Lenders want to see that you have a steady income and secure employment. Being in your job for at least six months can boost your chances. If you are self-employed, you’ll need to show additional paperwork like tax returns and business accounts.
Your Credit Score and Debts
Lenders will look at your credit score to decide if you’re a reliable borrower. A good credit score tells them you handle your money well. If you have unpaid debts or missed payments, this could make it harder to get a home loan. Paying off credit cards or other loans can help improve your borrowing power.
Your Deposit and Loan-to-Value Ratio (LVR)
A larger deposit lowers your Loan-to-Value Ratio (LVR), which is the amount you borrow compared to the value of the house. Most lenders prefer an LVR of 80% or less, as this reduces their risk and may help you avoid paying extra fees like Lenders Mortgage Insurance (LMI).

How Can You Improve Your Chances of Getting a Home Loan?
Success comes from careful preparation and smart financial habits.
Save More and Pay Off Debts
Saving a bigger deposit and clearing your debts can make your application stronger. Lenders will see you as a lower risk, and you might also get better interest rates on your home loan.
Keep Your Credit History Clean
To make your home loan application more attractive, always pay your bills and debts on time. Avoid applying for too many credit cards or loans in a short space of time.
Prepare All Your Documents Early
Having your paperwork ready – like payslips, bank statements, and ID – will make the process quicker and easier when applying for a home loan.

Can First-Time Buyers Get Government Support?
Yes, as a first-time buyer, you may be able to access schemes like the First Home Owner Grant (FHOG) or stamp duty concessions. These incentives can help reduce the costs involved and may make it easier to qualify for a home loan.
Home Loan Support for First-Time Buyers with AAA Loans Australia
Your applications don’t have to be stressful. At AAA Loans Australia, we help first-time buyers every day to secure the right loan for their needs. Our team will guide you through every step of the process to help you move closer to owning your dream home.
Visit AAA Loans Australia to get started today.