3 terms every first home buyer should know
So you’re finally taking the leap and buying your first home. Congratulations, and welcome to the world of real estate! It’s a fantastic decision, but the realm of property can be extremely confusing. If you don’t know your way around, you might find yourself signing up for a home loan that doesn’t meet your needs.
To arm you in the coming flurry of paperwork and legalese, we’ve put together a short list of terms every first home buyer should know.
Listen up, because these terms could save you a lot of cash and a boatload of bother.
1. Lender’s mortgage insurance
Providing mortgages can be a risky business. Every lender knows to ensure that they are protected in the unfortunate event that their clients are unable to pay back their loans and are forced to default.
Lender’s mortgage insurance is the thing that protects them. So how does it affect you? Well, the higher your deposit, the less risk the lender has, and the less they have to rely on their insurance. If you save up a deposit of 20 per cent instead of 10 per cent, you may find that you can get a better deal from your lender.
2. Loan pre-approval
As if the loan approval paperwork wasn’t enough, now we’re talking about pre-approval too? Yes, we are, and so should you! Gaining pre-approval from your lender means that they have evaluated your credit score and financial situation and are giving you a soft limit on what they think they are able to lend you.
Why is this useful to you? It gives you the ability to go out house-hunting with an idea of what you can afford. There is nothing more disappointing than finding your dream home, applying for a loan to purchase it and finding out you are unable to get the amount that you needed. Get loan pre-approval instead.
3. Mortgage broker
Speak to a broker instead.
You’re stuck in a rut – finding a loan that suits your needs is proving impossible. You’ve spoken to all sorts of lenders and nobody seems able to give you what you want.
Instead of slogging through dozens of mortgagers, speak to a broker instead. These experienced professionals seek out the loans for you, enabling you to simply state your requirements and let the mortgages come to you. You might even find a great deal along the way!