Be prepared when applying for a home loan
When you are ready to start shopping around for a home loan, whether a first-time home buyer or current homeowner looking to refinance an existing loan, there are a few things to keep in mind before jumping right into unknown territory.
Here are 10 Penrith home loan tips to help make the process as smooth and easy as possible:
1. Competition is Fierce for your Business
Instead of just taking the first offer from the first lender that comes along, take advantage of the competitive rates offered by a variety of different lending sources. Shop around for the best interest rates, options to reduce the repayment term of the loan and the pros and cons of each type of loan.
2. Setting Goals
Of course, the goal is always to get the most competitive interest rate that works with your budget, but don't just stop there. Consider what is going on in your life now, and what will be coming up in the future. The home loan you select can make or break your financial future.
3. What can you Really Afford?
Take the time to crunch some numbers before beginning the process of applying for a home loan. Take a look at your total debt, savings, additional sources of income and assets. Having a clear understanding of where you are now helps you choose the right home loan for where you want to be.
4. How do you Choose the Best Home Loan?
Because there are so many options to choose from out there, doing your research and having a good understanding of the benefits of each loan type will really help you better decide what will work best for you. (see Penrith Home Loan Tips #10)
5. Can you Qualify for a Home Loan with less than a 20% deposit?
In some cases, you can put down less than 20% (of the total home cost) towards the purchase of a new home, however, you will more than likely have to pay Lenders Mortgage Insurance (LMI) This is a one off fee that can be added to the loan.
Be sure to ask about any other up-front fees or charges that may accompany different types of loans.
6. Current State of the Market
Knowing what the current trends are in home lending, housing, employment, tax laws and the like can be confusing and overwhelming. Calling upon an expert who can tell you what's going on in the marketplace may make choosing one home loan over another an incredibly important decision (see Penrith Home Loan Tips #10).
7. How do you even Begin the Process of Applying for a Home Loan?
As with anything new or that involves a lot of paperwork and approvals, one of the hardest steps to take is the first one. Knowing exactly what to do first and having a step-by-step process to follow makes things much easier for you to follow along with and understand.
8. Getting the Best Loan-to-Value Ratio (LVR)
Are you going to be paying too much loan for too little house value? Understanding the market value of a home you're interested in purchasing for the price is a key starting point.
9. Is there Extra Help for First-time Home Loan Customers?
Be wary of special introductory rates offered by lenders. These special rates may expire after a few months and then you'll find yourself with a higher-than-anticipated interest rate. There are, however, grants available for first-time home buyers that can help with securing a great deal.
10. Use a Mortgage Broker!
(Finally…Penrith Home Loan Tips #10)
Using a broker can really help you through the process of applying for a home loan, refinancing and simplifying the process of figuring out what will work best for you, your goals and your financial well-being. Brokers get paid by the selected lender, so you don't have to pay fees to them. Because brokers are paid directly by the lender, using a broker does not affect your interest rate, incur additional fees or taxes and can really help get the best home loan specifically with you in mind.
Buying a home for the first time can be intimidating to say the least. It really makes sense to work with someone who's an expert in the field, works with a lot of different lenders and can explain the many options and things to watch out for when making one of the biggest financial investments of a lifetime.
Even if you currently own your home and have gone through this initial process, it really pays to check every couple of years to see if you can get a better interest rate or take some precious time off the repayment schedule by refinancing an existing home loan (bonus Penrith Home Loan Tips #11).
In the Penrith and surrounding areas, Paul Holland of Mortgage Choice is just a phone call away to help you with all your questions and get you the best home loan rate. Call Paul for a free, no obligation consultation at 02 4789 0808.
In the meantime, keep these Penrith Home Loan Tips handy when you're ready to start shopping around for the perfect home loan.