You’ll need to scrutinise all your next moves, just to anticipate the possible pitfalls that may cut your dream of owning a home short. Being prepared is crucial, and a huge part of that comes with research and groundwork.
To help make sure you get your financial loans right, we’ve created this mini-series designed to help you learn more about ways you can get approved—even on your first try. Without further ado, here’s part one containing tips and tricks:
Tip #1: Scrutinise your current income and debt
Taking on a mortgage is a heavy obligation, and you’ll want to prepare for it carefully. Your first step should be to document your monthly finances, which includes your income and debt repayments. Keep in mind that you’ll likely be asked to provide your payslips, so make sure to begin collecting yours. If you’re self-employed, however, you will be asked to provide tax returns as your main proof of income.
If you wish to get approved, however, make sure to keep your credit within the lender’s specific ratios. Your income and debt record must show that you can truly afford a mortgage repayment, and anything less than their standards will affect your chances of getting approved. If you’re currently handling big debts, it’s best to first pay them off.
Tip #2: Identify your mortgage budget
Before even settling for a mortgage plan, you need to first determine the home price you can afford. It also follows that you identify one you can comfortably pay for monthly, which includes any taxes, fees, insurance, utility bills, and of course, your other living necessities.
That said, it’s important to lay down your current financial health. Are you truly ready for the biggest purchase of your life, interest rate, property taxes, and insurance involved? If your answer is yes, you’ll likely get approved!
Tip #3: Save up for the deposit
Apart from your mortgage loan application, bear in mind that you’ll also be asked to deposit a sizable portion of the home’s price. It’s important to determine what you can afford, but ideally, it should be at least 10 percent of the total purchase price.
If you can afford it, however, opt to deposit at least 20 percent—in doing so, you make sure to reduce your monthly mortgage repayments significantly. In the long run, this could be helpful—especially if you finally need to take maintenance and repair costs into account, along with other surprises. If you can afford such a deposit already, you’re more than qualified to apply for a mortgage!
The Bottom Line
If you’ve already met all the tips aforementioned, you’re now considered as a prime borrower candidate—with good credit and income, ready to become a homeowner. You’ll likely have access to good mortgage lending rates, but it’s also vitally important to shop around. Stay tuned for the next part of our series!
For the best home loans in Sydney, Wealthy You has you covered. We are an Australian mortgage company, servicing clients for nearly a decade. We offer you a variety of mortgage solutions, all of which have been tailored to meet your specific needs. Allow us to make financing simple—reach out to us today.