There is some excellent news concerning home loans in Australia. The demand for home loans has increased slightly, which is always a sign that the time is right for getting a home loan. What is more, the lenders are said to be giving even more for eligible borrowers, so now is the time to borrow! You need to look closely at all your options and considering that this is the time to borrow, let’s look at the main things you need to consider which will let you choose the right loan with minimal stress involved.
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Budget revision
Be honest about yourself and your budget. Calculate how much you can actually afford to get. This self-checking is what you probably have dreaded for some time, but it is inevitable.
First, begin with your overall monthly income, taxes, or any other sources of income that could be heading your way. Of course, add your partner’s salary to the calculation. Then, determine the expenses, without your current rent. What could be a bit tricky is forecasting how long you are going to remain at your current job(s) and what the promotion prospects for the next decade or two are. Also, don’t forget to include the prospect of having children into the equation if you are planning on setting a family. Strangely enough, they also fall under the “expenses” category.
Source: Magazine Mantra
Get rid of debts
In order to apply for a loan successfully, your credit history should be as clear as possible, so if you have some credit card bills that aren’t settled, deal with them timely. Any lender you approach is going to look at your debt history, so try to make everything picture perfect.
How much?
You should have at least a vague figure about how much your future home might cost. The statistics differ from state to state, from neighbourhood to neighbourhood. For example, if you live in Sydney, the average home price is $980,000, which requires that you are earning around $150,000. Of course, exceptions are always possible, but this is what you can usually expect.
The bigger, the better
The deposit, of course. The minimum you should have is 5%, but you should then get ready to be faced with really high interest rates, and possibly be obliged to pay mortgage insurance to the lender (if the deposit is lower than 20%). Therefore, try to raise the deposit for this purpose.
There are different ways of getting a good-sized deposit. For instance, you could apply for a First Home Owners Grant. Asking your parents or family for a loan sounds great, but it can also narrow down the loan options at realistic loans. Getting a personal loan to create a deposit and getting a loan approved is manageable, but a bit complicated.
Source: The Indian Wire
Do your homework
We live in beautiful times concerning the offers of lenders. There are so many options nowadays and the market is highly competitive, which is great since you are in a position to choose. There are variable and fixed-rate loans, investment and interest-only loans, and so on. Also, there are several kinds of mortgages, so do the research and find out what works best for you.
Nowadays, lenders are doing everything they can to draw you in and eventually, be the institution that gets your application. For example, you can use the service of online home loan application tracker and monitor what exactly is going on with your application. The waiting period is always stressful, but with this application, you are always keeping track without making frequent calls to the lender.
Get pre-approved
Prior to officially applying for a loan, it would be a great idea to get pre-approved for a home loan. This is similar to the real deal, except that you still have some time to work on what needs improving. Also, it is giving you a boost and making you stand out among the competition (if you and others are eyeing off the same house). Have in mind that these are pre-approvals; hence, they are temporary, usually last about six months.
Get ready for surprises
There are definitely going to be some unpleasant financial surprises such as registration fees, application fees and so on. Doing the paperwork has never been easy, has it? Be prepared to spend more than you have initially planned.
Getting a home loan can turn out to be quite a long and tiring process, but suffice it to say, it is undoubtedly worth it. Follow the suggestions we have enlisted, and it just may even become enjoyable.
