A renter’s roadmap to becoming a home owner

As he observed, lenders want to see more than just a bank balance. Instead, they need evidence of “at least three to six months’ regular savings”, a strong credit score and a secure financial position.

Here is a six-month timeline for renters preparing to make the move into home ownership.

Six months before the offer

Tenants have one advantage when it comes to applying for a home loan: they have strong evidence they can make regular payments.

“A tenant has a record of being able to meet payments by paying rent in a consistent and timely manner,” said Withers. “If you have a strong track record of paying your rent on time, and any other regular payments, then your credit score is likely to be high.”

In the six months before buying a home, tenants should ensure that all rent and bills are paid on the dot in order to keep their credit score squeaky clean.

This is also the ideal time to start regular savings.

Consistent contributions to a savings account, term deposits, shares or managed funds, and inheritance funds held for at least three months can all be counted as proof of savings.

The six months before purchasing a home is the time to double down on savings, not to make major career changes.

“Hold off on any major life changes, like starting a new job or business,” he suggested.

Three months before the offer

Three months before making an offer is the time to start getting paperwork together.

As well as speeding up the home loan application process, Withers stated that “organising your key documents, such as recent payslips, tax returns and bank statements, will also give you a clearer picture of your financial situation”.

A complete inventory of income and expenses is another must-have for those hoping for a speedy finance application process.

Included in the inventory should be: income details; personal ID; everyday living expenses; debts, plus a plan to settle them; and all assets, including superannuation statements, shares and cars.

“Lenders accept different types of income as long as it’s consistent, but you must be able to provide sufficient evidence of this,” said Withers.

One month before the offer

The month before you put down a deposit is crunch time for home loan pre-approval applications.

While some lenders might claim processing times of “one day, or even [more] wildly, one hour”, Withers noted that this is the exception to the norm.

“Factor for about four to six weeks from the time you submit an application to having the funds available,” he advised.

Speaking to specialist mortgage brokers will also provide a clearer picture, with Withers noting that they “have access to resources that estimate how long approval times currently are with potential lenders”.

“I would personally avoid the high-stakes, high-stress strategy of waiting until I’ve paid a deposit before I apply for a mortgage wherever possible,” Withers said.