Getting a mortgage can be tricky, especially if you don’t know specific tips and tricks to find out what you really need and do away with the unnecessary. You want the leanest, most practical deal out there, but how exactly do you find it? Plus, if you don’t, does that mean you need alternative mortgage funding?
Here are some hacks to get a mortgage at the perfect time!
Make Sure You and Your Partner Can Afford It
Mortgages aren’t financial plans you decide about willy-nilly. It’s a major investment as it requires a long-term commitment to pay off the remainder of what you owe to your lender. Home loans consider your combined gross income to determine what interest rates they can give you and the amount they are willing to lend.
A low debt-to-income (DTI) ratio could lead to lower interest rates and a higher amount lent because your record proves financial stability. Conversely, a higher DTI ratio (meaning the costs of your loans are more than your combined income) leads to low-quality mortgages or even the denial of one!
Socio-political events also factor into the specifics of a mortgage. For example, a low-cost house could come across as a shoo-in for a home loan because it’s relatively affordable. However, your savings could come to naught if the developer makes up for the low cost with high-interest rates.
On the other hand, certain crises could positively impact your mortgage in that they force the industry to adjust with more exciting deals to draw in buyers. For instance, KPMG Australia noted in a July 2021 report that the decline of home loan interest rates drove a spike in property prices due to the pandemic. While the face value is higher, it is a more sustainable loan, especially if you can afford the instalments without alternative mortgage funding.
The Seasons of the Year
Another wise method for securing the best mortgage at the perfect time is to decide according to the times of the year! Each season has its unique characteristics when it comes to price or inventory:
- Spring is the start of a new buying season. It is the healthiest marketplace season as potential buyers consider various properties due to an increase in inventory. This season may not offer you lower interest rates and reasonable prices as you have loads of competition in house hunting.
- Summer is the middle ground between spring and fall, in that you could snag a property at a reasonable price if you’re still on the waiting list by the time the previous buyer suddenly backs out. Be wary, though, as the wait might be for naught if the primary clients decide to purchase.
As a precaution, take a look at several properties within your price range, then examine how each mortgage looks. These will be your options if any of the primary clients back out or you run out of inventory and have to wait until the last seasons of the year.
- Fall and winter are the best time to buy properties if you enjoy negotiations. These are what you call the off-peak seasons, meaning there are few to no buyers in the market. As such, sellers lower the price to entice customers to buy.
Remember, though you may get a price within your budget, ensure you and your partner have the means to pay off the mortgage so you can get lower interest rates and don’t have to worry about alternative mortgage funding.
A Final Reminder
Applying one or more of these hacks will get you a reasonable property price and a sustainable mortgage payment for the coming years. It’s not about being stingy or pinching pennies just to get your dream home. It’s about making the best financial decisions at the right time, so your family can enjoy life with less worry.
But if you’d like to bypass all the hassle and acquire your dream home right now, get in touch with Wealthy You’s team of experts! We’re an Australian firm that provides alternative finance in Sydney to make your home refinancing much simpler. Chat with us today!