Top tips to research property before your home loan

The research you do before choosing a property affects what you can borrow and on what terms.

Most midwives look at location and layout when viewing properties. Lenders look at loan to value ratio, valuation risk, and whether the property meets their security criteria. The disconnect between those two perspectives causes problems at pre-approval and settlement. If you research a property with lending criteria in mind, you avoid applications that stall or offers that fall through because the lender won't support the purchase.

What lenders assess when you apply for a home loan

Lenders assess the property as security, not as a home. They want to know it will sell quickly if you default, and that the price you're paying reflects its actual market value. That means they care about property type, location desirability, building condition, and how the valuation compares to your contract price. A lender might approve your borrowing capacity in principle but decline the loan once they see the property you've chosen.

Consider a midwife applying for a variable rate home loan to purchase a studio apartment in an area with high investor concentration. The lender's valuer assesses the property at 8% below the contract price due to oversupply in that building. The application proceeds, but the loan amount is based on the lower valuation, leaving the buyer short at settlement. That situation is avoidable if you check supply levels and recent sales before making an offer.

Suburb data that affects your loan approval

Median sale prices, days on market, and auction clearance rates tell you whether a suburb is stable or volatile from a lending perspective. Lenders apply stricter criteria in postcodes with falling prices or high vacancy rates because the property becomes harder to sell if you can't meet repayments. You can access this data through property research platforms or by asking your broker to pull a suburb profile before you start looking.

If you're comparing home loan options across different areas, check whether the postcode appears on any lender's restricted list. Some lenders limit lending in regional areas, in postcodes with high unit development, or in mining towns. Knowing that before you make an offer means you can apply for a home loan with a lender who will actually support that location.

How property type changes your borrowing capacity

Lenders treat apartments, townhouses, and houses differently when calculating how much they'll lend. Studio apartments and properties with fewer than two bedrooms often attract lower loan to value ratio caps, meaning you need a larger deposit even if your income supports the loan amount. Serviced apartments, properties with commercial zoning, or buildings with known defects can be declined outright by some lenders, regardless of your financial position.

In our experience, midwives working shift patterns often prefer apartments close to the hospital. That makes sense for your roster, but if you're looking at a building with more than 50% investor ownership or a studio under 50 square metres, expect some lenders to either decline or require a 20% deposit instead of the 5% or 10% you might access through no LMI loans for midwives. Ask the selling agent for the strata report and building size before you get attached to a property that won't meet lending criteria.

Using a valuation to confirm the contract price

A lender-ordered valuation happens after you've signed the contract. If the valuer assesses the property below your purchase price, the lender bases the loan amount on the lower figure. That means you either need to make up the shortfall in cash, renegotiate the contract, or walk away and lose your deposit.

You can reduce that risk by comparing your intended offer to recent sales of similar properties in the same street or building. If comparable properties sold for less in the past three months, a conservative valuation is likely. Some brokers can arrange a pre-purchase valuation or desktop appraisal before you make an offer, which gives you a clearer idea of whether the asking price will be supported. If you're using a fixed rate or split rate structure, a valuation issue discovered late in the process can delay settlement past your rate lock expiry.

Researching strata records and building reports

Strata records show special levies, planned maintenance, and whether the owners corporation has adequate funds in the sinking fund. Lenders review the strata report as part of their assessment, and they'll decline applications if the building has structural issues, insufficient insurance, or a sinking fund below the recommended level. A building with a pending special levy of $30,000 per unit will either be declined or require you to prove you can cover that cost in addition to your deposit and settlement costs.

Request the strata report as soon as you're serious about a property. Look for any mention of defects, water damage, cladding issues, or disputes between owners. Those details won't appear in the online listing, but they will appear in the lender's assessment. If the strata report raises concerns, your broker can check which lenders will still consider the property before you proceed with an offer.

Checking zoning and title type before you make an offer

Company title, stratum title, and leasehold properties are treated differently by lenders, and some won't lend against them at all. If the property is on leasehold land or has fewer than 50 years remaining on the lease, expect limited lender options and higher interest rates. Rural properties on large lots may require a lower loan to value ratio, and properties with commercial zoning or dual occupancy potential can be assessed as non-standard security.

You can check title type and zoning through your conveyancer or by searching the land titles register in your state. If you're looking at a property that isn't standard residential freehold, discuss it with your broker before making an offer. That conversation takes ten minutes and can save you from signing a contract for a property that no lender will support at the loan amount you need.

Call one of our team or book an appointment at a time that works for you. We'll help you research properties with lending criteria in mind so your application proceeds without valuation issues or unexpected conditions.

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