What are the best ways to secure a mortgage? · The Money Wellness Pond 🐸

Janene O'Connor

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9d • Questions ❓

What are the best ways to secure a mortgage?

This question came from

@Jonah Pitkin

- with thanks

If you want the “best ways” to secure a mortgage, think in three buckets:

🐸 serviceability,

🐸 deposit/structure, and

🐸 risk profile.

1) Maximise serviceability (this is usually the real limiting factor when getting your loan)

Stabilise income: consistent payslips, avoid job hopping right before applying.
Reduce liabilities: pay down credit cards, personal loans, car finance. Even unused credit limits reduce your overall borrowing power.
Clean spending history: 3–6 months of statements matter—reduce BNPL, gambling transactions, and “mystery spending.” The bank managers are looking closely at your habits when they assess you for your loan.
Add a second income stream (even small, consistent) if it’s provable and ongoing. (like you mentioned Jonah - the small online business you have will have a huge benefit to your serviceability

2) Strengthen your deposit position

Aim for 20% where possible to avoid LMI (Lenders Mortgage Insurance or reduce it).
If you can’t: 10–15% can still work, but your file needs to be clean and your income stable.
Genuine savings is a big deal for many lenders—regular, consistent saving is gold.

*** and remember Jonah that for your situation if you buy an investment property first, you would no longer be entitled to the First Home Buyers grant

3) Pick the right structure (parents can help, but choose the safest method)

There are two common ways parents help:

A) Parent as guarantor (often better than co-signing)

This uses equity in the parent’s home as security for part of your loan (usually the deposit portion).
Benefit: you may buy with a smaller deposit and potentially avoid or reduce LMI.
Risk: your parents’ property is on the line if you default—so it must be planned properly.
Best practice: set a clear plan for how and when the guarantee is released.

B) Parent as co-borrower / co-signer

This means they’re legally responsible for the debt too.
It can boost borrowing power, but it also ties up their borrowing capacity and increases their risk.
It can complicate things later for them (refinancing, investing, retirement plans).
Use this when it’s genuinely needed and you’ve had proper 'solicitor' advice.

4) Make your application “low risk” to a bank

Keep your employment and finances steady for the 3–6 months before applying.
Don’t take on new debt, don’t open new cards, don’t do big Afterpay cycles.
Get pre-approval (or at least a full borrowing assessment) before shopping seriously.

5) The fastest path: use a broker properly

A good broker will:

run servicing across multiple lenders,
recommend the best structure (guarantor vs co-borrower vs deposit strategy),
package your file so it’s clean and bank-ready.

Bottom line: Yes, parents can help but the best mortgage strategy is usually: reduce liabilities + prove consistent savings + choose the safest family support structure (often guarantor) + get the right lender fit.

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