Applying for a home loan
Thursday, 4 February 2016
The application process to buy your own home can be pretty overwhelming. Don’t stress. We’ve got some handy tips to get you on your way.
1. Home loans can vary
Understand that not all home loans are the same. There are thousands of home loan options available, so look around and find the one that best suits your situation. Start your research by speaking to friends and family, or looking online.
2. Prepare for your interview
The loan interview is a critical point in securing a home loan. A lender will require you to bring in identification, proof of income, declaration of assets and recent debt statements. If you don’t have all this information and aren’t prepared it will delay the process of applying for a home loan.
3. Be stable
Where possible, stay with your employer while going through the home buying process. Any changes to your employment or income status can stop or delay the process, and may impact on your ability to meet the repayments.
4. Compare loans
Compare the features and benefits of each loan against your loan criteria. The best way to compare home loans is via a fact sheet that all lenders are required to provide. This is an easy way to directly compare features and fees.
5. Know your limits
Set a limit on how much you can borrow and how much you can comfortably repay. Don’t over-stretch yourself and place yourself under financial stress.
6. Save and save
Start saving. Without savings you won’t be able to meet the deposit requirements of a home loan. Additionally, a lender will want to see history of managing your money, which will give them confidence that you will be able to meet regular mortgage repayments.
7. Know the process
Find out how the approval process works, how long it will take, who will be your main point of contact and how you can contact them if you have questions throughout the process. This ensures you can quickly access information throughout the home buying process when needed.
8. Do the math
Understand the full costs involved with a home loan and buying a home. It’s not just the deposit you’re forking out, you may also need to pay Lenders Mortgage Insurance, and on top of that there are council rates, emergency levies and home and contents insurance. Visit www.moneysmart.gov.au for more information and tips about budgeting.