For many Australians, buying their first home is the ultimate ambition in life and thanks to the flexible lending policies made available from many leading banks – this dream is becoming a reality for more and more people. But with that in mind, the country still boasts some of the highest property prices in the world and with these values expected to increase well beyond 2020; it’s never been more important to properly prepare for a mortgage application.
And with that in mind, here are a selection of tips to help you to secure your mortgage and maximise your chances of home loan approval.
Hire a mortgage broker
This tip isn’t an obligation, but it certainly comes highly recommended from industry insiders and first time home buyers alike. Mortgage brokers are specialists when it comes to finding the ideal types of loans for their customers. By comparing interest rates and getting to grips with the latest options on offer – you could save yourself a small fortune.
Calculate your earnings
If there’s one thing that ALL banks will want to know – it’s how much you bring in per month. This might seem a little intrusive at first glance, but the reality is that they need to know this information to gauge the likelihood of you being able to pay back what you owe. By taking the time to calculate your earnings and having them professionally prepared (by a financial advisor, for example), you’ll be one step ahead of others in your position; which could potentially speed up your application.
Keep your deposit to one side
As open as many banks will be when it comes to lending reliable borrowers the money needed to buy a house – they will still require certain criteria to be met. One of these is a deposit which will typically be calculated based on the total amount that is being borrowed. Some lenders will require 10% while others may want more or less, depending on the borrower and their reputation as far as their finances are concerned.
Minimise your expenses before you apply for a mortgage
Another great way to make yourself look fantastic to a bank is to show them how good you are at managing your money. They won’t care if you buy clothes daily, if you smoke often, or if you have multiple subscriptions – but they will want to know that you can afford to repay them what you owe each month (or fortnight). By cutting out extra expenses for a few months before your application, or even for a full 12 months; you could demonstrate even more borrowing power to your lender.