Are you ready to take out a home mortgage?
Not everyone we meet with is ready or able to afford a property right away.
If buying a home is at the top of your priority list, there are six items to consider that may improve your chances of securing a mortgage.
1. Know the Basic Lending Rules
The first step is to know the basic borrowing rules. You can use a home loan calculator to work out how much you can afford to borrow. The amount you can borrow is based on your current income, expenses, and debts. It's important to remember that the amount you can borrow is not the same as the amount you should borrow. You should only borrow what you can afford to repay.
2. Keep Your Documents Up to Date
It's important to keep your documents up to date when you're applying for a home loan. Lenders will need to see your most recent payslips, tax returns, and bank statements. They'll also need to see proof of any other income, such as investment income or rental income. If you're self-employed, you'll need to provide even more documentation, such as financial statements and tax returns.
3. Work Out the Right Type of Mortgage For Your Needs
There are many different types of home loans available, so it's important to find the right one for your needs. You should compare interest rates, fees, and features to find the best deal. There are also different types of loans for different situations, such as investment loans, first home buyer loans, and low deposit loans.
4. Don't Submit Your Resignation During the Buying Process
If you're employed, don't submit your resignation during the buying process. Lenders like to see stability in employment, so quitting your job could jeopardise your loan application. If you're self-employed, make sure you have enough work lined up to cover any potential gaps in income.
5. Save Up For a Larger Deposit
A larger deposit will give you more options when it comes to choosing a home loan. It will also help you avoid paying mortgage insurance, which is required if you have a deposit of less than 20%. If you can't afford a large deposit, there are options available, such as low deposit loans and guarantor loans.
6. Ask for Professional Help
Applying for a home loan can be a complex and confusing process. If you're not sure where to start, or you need help understanding the jargon, there's no shame in asking for professional help. A mortgage broker can help you compare home loans and find the best deal for your needs. They can also answer any questions you have about the process.
If buying a home is at the top of your priority list, there are six items to consider that may improve your chances of securing a mortgage.
Conclusion
Buying a home is a big decision, and there's a lot to think about. If you're ready to apply for a mortgage, make sure you understand the basics of lending, keep your documents up to date, and work out the right type of loan for your needs. And don't forget to save up for a larger deposit - it will give you more options and help you avoid paying mortgage insurance.
If you are looking for the best mortgage brokers in Australia, look no further than our experts here at Wealthy You. We are an Australian Mortgage Company servicing Sydney for almost a decade, and because of this, we can offer you a variety of mortgage solutions to meet your specific financial needs. Call us today and let us discuss all your home loan options.
