Are you thinking of buying property in the near future? Purchasing property and securing a home loan can be a stressful experience, and there is definitely a certain way to go about it to ensure things run smoothly.
We have compiled a list of things to avoid as you go through the process of securing your mortgage.
Going in blind
Good mortgage choices are made by doing your homework and conducting thorough research of home loan types and features, different types of lenders and the documentation required to apply for a home loan.
Our brokers can work with you to find the right product for your needs. With access to hundreds of products offered by a wide range of lenders, we know how to filter through what’s available, and find a solution that will work well for you now, and into the future.
Failing to budget
If you aren’t budgeting your expenses at the moment, how will you stick to one once you are committed to mortgage repayments? Structuring a monthly budget of your income and expenses will help you determine the amount of money you can comfortably commit to your repayments. Additionally, a good budget can help when it comes to home loan application. Lenders favour borrowers that can demonstrate genuine savings, and easily meet their mortgage repayments.
Dismissing the value of pre-approval
Home loan pre-approval generally lasts for three to six months and is so helpful when on the hunt for a new home. You have the peace of mind that you can borrow a set amount, and can tailor your house hunting and moves at auction to match it. There is nothing worse than getting set on a property and finding out you can’t afford it.
Another bonus of pre-approval is that you can pay the deposit on the spot at auction if you are successful!
Taking advertised interest rates on face value
It’s a common mistake to take the advertised introductory period rate as the rate of the entire loan term. Many people fail to realise that an initial period with a lower interest rate may only apply at the beginning of a new home loan. If the long term interest rate hasn’t been budgeted for then you could be in for a shock once the honeymoon period is over. A handy tip in these circumstances is to make your repayments as if the introductory/honeymoon period doesn’t exist, so you’re used to servicing your regular repayments once it’s passed.
Adding unnecessary features onto your home loan
Many borrowers become distracted by bonus loan features, and end up choosing a home loan that wasn’t the best option for them. The reality is, additional features usually come at an additional cost, and just because the feature seems really handy, or worked well for your sister-in-law, doesn’t mean that it’s going to work for you.
Every situation is different, so seek advice from our brokers and make an informed decision when selecting your mortgage.
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