Getting a home loan – especially the right home loan – isn’t always easy. Lenders often have very exacting approval criteria, and as a borrower, you may not always know what is required. If you are thinking of applying for a home loan – whether you are a first home buyer or you are looking to refinance your current loan – here are our top seven tips for finding the right loan (and getting approved).
Use a mortgage calculator
The key to finding a successful home loan is finding one that you can afford. Not being able to make ends meet can be incredibly stressful, so avoid taking on a mortgage you can’t afford. Use our mortgage calculator to work out how much you can afford to pay back each month, and how much you can afford to borrow overall. Create a budget to ensure your loan repayments are affordable.
Improve your credit rating
When you apply for a home loan, the lender will assess your credit history to determine whether you are eligible for a loan, how much you are eligible you to borrow, and the interest rate you will pay on your loan. Applicants with a good credit history, a good savings record, and a steady income will find it much easier to get approved for a loan. Apply for a copy of your credit file before you apply for a loan, have any mistakes corrected and always deal with credit responsibly. You may also like to read this article that talks about how applying for loans can impact your credit rating.
Save a deposit
Try to save a substantial deposit before applying for a home loan. While some lenders accept deposits of 5-10%, aim to save 20% of the property price. This will make lenders look on your application more favourably, and it should make your loan more affordable in the short-term and the long-term. If you would like help with a savings plan you might like to talk to the team at Plan Me.
Get your financial documents in order
Applying for a home loan involves a lot of paperwork. You will need to supply a range of financial documents, so be sure to get all your paperwork in order so you are prepared for the application process. If you apply without the right paperwork, your home loan could be rejected or delayed. You may also like to read this article that talks what information you might need.
Compare home loan options
There are dozens of lenders and hundreds of home loans on the Australian market, which makes comparing all your options very time-consuming. Research all your options, compare various home loans and lenders, and read the small print. Use the comparison rate to compare home loans, and use a mortgage calculator to find the best option for you.
Understand your options
There are various types of home loans available. There are fixed rate, variable rate and split home loans, there are honeymoon loans and investor loans, there are construction loans and low-doc loans, there are bridging loans and reverse mortgages. If you want to find the right home loan, you will need to do some research to find out what each loan offers. You can read more about the different types of home loans here.
Find a mortgage broker
Using a mortgage broker can make the above steps much easier – and faster. A mortgage broker can advise you on what kind of loan you need and how much you can afford to borrow, they can search for loans for you, they can help you with the complicated application process, and they can liaise with your conveyancer, real estate agent and your lender. Finding the right mortgage broker can make a stressful process much less stressful! Lend Me mortgage brokers will not charge a fee to do this for you, they get paid directly from the bank at no cost to you. Why do the hard work? You may also like to read this article that talks about how a mortgage broker can help you.
Lend Me – Home Loan Brokers – Mortgage Brokers – Perth, Western Australia