getting ready to buy a house: a step-by-step guide for doctors

Buying a house is a major milestone – and often the biggest financial commitment you’ll ever make. While it’s exciting to scroll through property listings and attend open homes, securing finance is where the real journey begins. Before you get too attached to a dream home, it’s crucial to understand what you can afford and how to navigate the loan process smoothly.

understand your borrowing capacity

Many buyers start their home search before knowing how much they can actually borrow. This is putting the cart before the horse. Instead, the first step should be working out your borrowing power.

At the Bongiorno Group, we use the same servicing calculator as Westpac, meaning we can quickly assess your borrowing capacity with your income and some basic financial details. This early insight prevents you from wasting time looking at properties outside your budget and helps set realistic expectations.

know what banks consider when assessing your loan

When applying for a home loan, banks assess two main criteria:

• Serviceability – your ability to repay the loan, based on your income and expenses
• Equity – how much you can contribute upfront, either through savings, a parental guarantee, or equity in another property.

Doctors often have access to  95% loan-to-value ratio (LVR) loans, meaning the bank lends 95% of the purchase price. However, you’ll need to prove where the remaining 5% is coming from – whether it’s savings, a gift from family, a guarantee or another source.

get pre-approval before making an offer

A pre-approval is essential before bidding at auction or making an offer. It gives you confidence that a bank is willing to lend you the funds, subject to final checks. The pre-approval process also includes a credit check, ensuring there are no red flags in your financial history.

To apply for pre-approval, you’ll need to:

• Show how you’ll cover the 5% contribution (plus stamp duty)
• Disclose all assets and liabilities, including loans, credit cards, and HECS debt
• Demonstrate stable income and cash flow.

reduce liabilities to maximise your loan

One of the biggest barriers to borrowing is existing liabilities or as the bank terms it – your ‘statement of position’. Even if you don’t have much debt, banks look at your total credit limits, not just what you owe.

Ways to improve borrowing power:

• Reduce or cancel unused credit cards (a $20,000 limit could reduce your loan capacity by $80,000)
• Consider refinancing existing loans to extend the loan term and lower monthly repayments – Bongiorno Group has access to 35 year terms
• Pay off HECS debt if it significantly impacts your borrowing power.

For example, a doctor earning $200,000 may have a HECS repayment of $20,000 per year, reducing their loan capacity by up to $180,000. In some cases, paying off HECS early could make buying a home more achievable.

plan ahead for a stronger financial position

If you’re not quite in a position to buy yet, that doesn’t mean it’s game over. A financial adviser can help you strategically plan your next steps, whether that’s boosting savings, restructuring existing loans, or waiting until your income increases.

Unlike a bank or a mortgage broker – who simply tell you what you qualify for – advisors work with you to improve your financial position. That could mean adjusting your spending, restructuring debts, or even delaying your purchase to put yourself in a stronger financial position.

final thoughts

Buying a home is exciting, but preparation is key. Before jumping into the market, take the time to understand your borrowing power, reduce financial obstacles, and get expert advice. With the right planning, you’ll be well-positioned to secure your ideal home – without unnecessary stress.

Thinking about buying soon? Get your finances in order now so you’re ready when the right property comes along.

For further information or to book a complimentary meeting, please phone 03 9863 311, visit bongiorno.com.au or email enquiry@bongiorno.com.au

Mitchell McKeown MBA, BBA. (accounting/marketing), Dip FS (FP), Cert. IV FMB|director
Mark Bremner |senior finance consultant

As this general advice has been prepared without taking account of your objectives, financial situation or needs, you should consider the appropriateness of this advice before acting on it. If this general advice relates to acquiring a financial product, you should obtain a Product Disclosure Statement before deciding to acquire the product.