How to Get Mortgage Ready: A Step-by-Step Guide

Buying a home is one of the biggest financial decisions you’ll ever make. Whether you’re a first home buyer, upgrading, or investing, being “mortgage ready” can make all the difference between a smooth approval and a stressful experience.

So, what does it mean to be mortgage ready? It’s about having your financial situation organised and presenting yourself to a lender in the best possible light. Here are the key steps to help you prepare.

1. Understand Your Current Financial Position

Before you start browsing real estate listings, take stock of where you are financially. Lenders will want to see that you can manage repayments comfortably, so review:

• Income: Your employment status, contract terms, and length of service matter. Stable, ongoing income is preferred, but there are options for casual or self-employed clients too.
• Expenses: Look at your everyday spending. Could you reduce any discretionary costs to strengthen your savings and borrowing position?
• Debts: Existing credit cards, personal loans, and Buy Now Pay Later facilities all reduce borrowing capacity. Aim to pay down or close unused accounts before applying.

2. Build Genuine Savings

Most lenders want to see that you can save consistently. This doesn’t just show discipline – it proves you can manage mortgage repayments. A good benchmark is to save at least 5–10% of your target property price. Even if you’re using gifted funds or government grants, a track record of savings will help strengthen your application.

3. Check Your Credit Report

Your credit history gives lenders an idea of how you’ve managed debt in the past. It’s worth checking your credit file before applying:

• Make sure there are no errors or surprises.
• Pay bills on time and clear small debts where possible.
• Avoid applying for multiple loans or credit cards in the months leading up to your mortgage application.

4. Get Your Documents in Order

Being organised will save you time and stress. Most lenders require:

• Proof of income: Payslips, employment contracts, or tax returns if self-employed.
• Bank statements: Usually three months’ worth, showing income and spending.
• Identification: Driver’s licence, passport, or Medicare card.
• Details of existing loans or credit cards.

Having everything ready upfront means your broker can assess your situation quickly and avoid delays.

5. Understand Your Borrowing Power

Knowing how much you can borrow helps set realistic property expectations. Your borrowing power depends on income, expenses, deposit size, and lender policy. A mortgage broker can run the numbers for you, factoring in your specific situation and identifying lenders that match your profile.

6. Reduce Financial “Red Flags”

Lenders may question large unexplained transfers, high credit card limits, or frequent gambling transactions. Cleaning up your bank statements for at least three months before applying can make a big difference.

7. Get Professional Guidance Early

Every lender has slightly different policies, and what works for one may not work for another. A mortgage broker can:

• Compare a wide range of lenders and products.
• Identify which policies apply to your employment or income type.
• Structure your loan to suit both your short-term needs and long-term goals.

Final Thoughts

Being mortgage ready isn’t just about ticking boxes – it’s about showing lenders that you’re financially stable, organised, and prepared for the responsibility of a home loan. With the right preparation, you’ll give yourself the best chance of approval and a smoother journey into property ownership.

If you’d like a personalised assessment of your mortgage readiness, feel free to reach out – I’d be happy to guide you through the process.

📌 Disclaimer: FAM Brokers Pty Ltd ABN 62 685 825 969. Credit Representative 568326 is authorised under Australian Credit Licence 389328. Your full financial situation would need to be reviewed prior to acceptance of any offer or product. This is general information only and does not take into account your personal circumstances. Please seek independent professional advice relevant to your situation.