Proven tips to prepare for property purchase

Start with what you can save, not what you think you should borrow

Your deposit size drives every other decision. A buyer with 5% saved faces different lender options, different government schemes, and different upfront costs than someone with 10% or 15% put aside.

Consider a buyer who has saved $20,000. If they're looking in Salisbury North, that amount might represent anything from a 5% deposit to closer to 10%, depending on the type of property. The difference changes whether they need low deposit options through the Australian Government 5% Deposit Scheme, whether Lenders Mortgage Insurance applies, and which lenders are most likely to approve their application. A buyer with that deposit who also meets the income and property price requirements can use the scheme to purchase without paying LMI. A buyer who doesn't qualify for the scheme, or who prefers to avoid it, would need to save more or accept the insurance cost.

What counts as genuine savings, and what doesn't

Lenders classify savings into two categories: genuine and non-genuine. Genuine savings are funds you've accumulated over at least three months in your own account. Non-genuine savings include windfalls, one-off payments, or funds that appeared suddenly without a clear pattern of saving.

A buyer who receives $15,000 from family as a gift can use that money toward a deposit, but most lenders will still require evidence of genuine savings. That means if the total deposit is $25,000 and $15,000 came as a gift, the remaining $10,000 needs to have been saved consistently over time. The First Home Super Saver Scheme allows buyers to withdraw voluntary super contributions for a deposit, and those funds are generally treated as genuine savings because they reflect deliberate saving behaviour.

Some lenders will accept a smaller genuine savings component if the buyer qualifies for a government guarantee scheme or can provide a family guarantee. Each lender applies these rules differently, and preparation means knowing which category your deposit sits in before you apply.

Which documents lenders ask for, and why they matter

Every loan application requires proof of income, proof of identity, and proof of your deposit source. The specific documents depend on how you're employed.

If you're a permanent employee, lenders usually ask for your two most recent payslips, a letter of employment, and your latest tax return or notice of assessment. If you're casual or contract-based, expect to provide payslips covering a longer period, often 12 months, plus evidence that the work is ongoing. Self-employed buyers need two years of tax returns, business financials, and sometimes a letter from an accountant.

Beyond income, lenders will request bank statements covering at least three months. They use these to verify your deposit, assess your spending habits, and check for undisclosed debts or regular gambling transactions. A buyer with three months of statements showing consistent rent payments, minimal overdrafts, and no missed credit card payments presents a stronger application than someone with irregular deposits or frequent account fees.

The property itself also requires paperwork. If you're buying an established home, you'll need a copy of the contract of sale once you've made an offer. If you're building, lenders want the land contract, the building contract, and council-approved plans.

How pre-approval works in a local market like Salisbury North

Pre-approval tells you how much a lender is willing to lend before you start looking at properties. It's conditional, not guaranteed, but it gives you a budget and speeds up the process once you find a home.

In Salisbury North, where the housing stock includes a mix of older brick homes, newer builds in estates like Salisbury North Village, and some larger blocks closer to the industrial precinct, knowing your borrowing limit before you attend inspections keeps you focused. A buyer with pre-approval for a certain amount knows whether they can compete for a renovated three-bedroom home or whether they need to look at properties requiring some work.

Pre-approval usually lasts between three and six months. During that period, the lender has assessed your income, debts, and deposit, and they've confirmed you meet their lending criteria. The final approval happens once you've chosen a property and the lender values it. If the valuation comes in lower than the purchase price, you may need to renegotiate or increase your deposit.

Getting pre-approval before you attend auctions or make offers also signals to agents and sellers that you're in a position to proceed quickly.

Fixed or variable rate: what suits a buyer just starting out

Choosing between a fixed rate and a variable rate depends on whether you value certainty or flexibility. A fixed rate locks your repayments for a set period, usually between one and five years. A variable rate moves with the market, which means your repayments can rise or fall.

Buyers who want predictable budgeting, especially in the first few years of ownership, often choose a fixed term. If rates rise during that period, your repayments stay the same. If rates fall, you don't benefit unless you refinance or wait for the fixed term to end. Variable rate loans usually offer more flexibility, including the ability to make extra repayments without penalty and access to features like an offset account or redraw facility.

Some buyers split their loan, fixing part and leaving part variable. In a scenario where a buyer borrows $400,000, they might fix $250,000 for three years and leave $150,000 variable. That approach gives them repayment certainty on the majority of the loan while keeping some flexibility to pay down the variable portion faster if their income increases.

South Australian concessions and grants for buyers in Salisbury North

South Australia offers a First Home Owner Grant of $15,000 for new homes with no property price cap. That grant applies to homes that have never been occupied, including newly built houses, new apartments, and substantially renovated properties that meet the definition of a new home.

For established homes, no grant is available, but stamp duty concessions apply. Buyers purchasing an established home pay nil transfer duty up to $700,000 and a reduced rate on properties between $700,000 and $800,000. On new homes and vacant land, a full transfer duty concession applies with no price cap from 1 May 2025.

A buyer purchasing a new three-bedroom home in Salisbury North for an amount within the median range can combine the $15,000 grant with the full stamp duty concession and, if eligible, use the Australian Government 5% Deposit Scheme to purchase with a smaller deposit. The combination reduces both the upfront cost and the ongoing loan size.

Buyers looking at established homes in the area still benefit from the stamp duty concession, which can save thousands compared to a standard property transaction. If the property is your first home and you intend to live in it as your principal place of residence for at least 12 months, you're eligible.

How borrowing capacity changes with different income types

Lenders calculate how much you can borrow by assessing your income, your debts, and your living expenses. The formula differs depending on whether you're a permanent employee, casual worker, or self-employed.

A permanent employee with a stable salary of $70,000 per year, no dependents, and minimal debts will generally have a higher borrowing capacity than someone earning the same amount casually, because lenders apply a margin of safety to non-permanent income. Casual income is usually averaged over 12 months, and some lenders only count 80% of the total.

Self-employed buyers face the strictest assessment. Lenders typically average your taxable income over two years, which means if you've claimed significant deductions to reduce your tax, your borrowing capacity drops. A buyer who earns $90,000 in gross business income but shows $55,000 in taxable income after deductions will be assessed on the lower figure.

Understanding your borrowing capacity before you start looking prevents disappointment. If your income structure limits what you can borrow, preparation might mean reducing debts, increasing your deposit, or adjusting the property type you're targeting.

What happens between application and settlement

Once you've made an offer and the seller has accepted, the formal loan application begins. Your broker or lender will request the full set of documents, order a property valuation, and submit everything for final approval.

The valuation usually takes a few days. If the valuer assesses the property at or above the purchase price, the lender will issue formal approval. If the valuation comes in lower, you'll need to either renegotiate the price, increase your deposit to cover the gap, or walk away if the contract allows it.

After formal approval, your solicitor or conveyancer handles the legal side. They'll conduct title searches, review the contract, arrange building and pest inspections if you haven't already, and prepare for settlement. Settlement is the day ownership transfers, funds are exchanged, and you receive the keys.

The period between application and settlement is usually four to six weeks for an established home, longer for new builds. Preparation means keeping your financial position stable during that time. Don't take on new debts, don't change jobs unless unavoidable, and keep enough cash aside for settlement costs, which include legal fees, transfer fees, and any adjustments for rates or water.

Call one of our team or book an appointment at a time that works for you. We'll walk through your deposit, your documents, and your loan options so you know exactly where you stand before you start looking.

Frequently Asked Questions