READY WHEN YOU ARE
Someone once said success happens when preparation meets opportunity. Whatever lender or type of financing you ultimately select, it’s vital that you start preparing well in advance of application. Life can take some unexpected turns so you don’t want to be behind the eight ball, when the time comes and you’re ready…but not ready!
You don’t have to be ‘actively looking’ to know what your financial health really looks like. Depending on your future budget, you may choose to build or move into a house but either way, it pays to know, right? By working with a qualified and experienced professional early on – such as a mortgage broker – can help ensure the process goes as smoothly as possible.
Here are some key steps that a good mortgage broker will help you identify early on:
Obtain Your Credit Information: Well in advance of home shopping, you need to order your credit file. Make sure there are no inaccuracies or outdated information. You can get your files free once a year at www
Gather Key Documents: Any lender will need to see documentation of your income, employment, one to two years of tax returns (if you are self-employed), bank accounts, funds and other assets. It’s smart to compile this before you even begin shopping for financing options. It’s also useful to have at least a rough idea of your current household expenses; they will affect the amount of mortgage you can obtain and the maximum price of the house you can finance.
Determine How Much You Can Afford: You can get a good idea about this well in advance by working with your mortgage broker. Simple rules were cited in the past. However, today’s rules are much more complex. Most lenders take your basic information and enter it into automated underwriting models that blend credit scores, debt-to-income ratios and other factors to make decisions about loan sizes, rates and fees.
The bottom line is get accustomed to experimenting with different rates, deposit payment amounts, loan terms to see how your maximum mortgage amount varies and how that affects the top price you can afford for a house.
What are my loan options: With the power of the internet & media it is easy to see who has the cheapest interest rate, however your loan consists of so much more than just interest rate… and with your home loan being one of the biggest purchases you’ll ever make, is it worth leaving it up to a computer to choose the right loan for you? You will have many questions that only an expert such as a mortgage broker can explain and give appropriate advice on.
What are the entry & ongoing costs; does lenders mortgage insurance apply? What about a fixed rate, but how long should I fix it for? Or should I split my loan and if so, how much should I split, should I have an offset or redraw account, should I go with an interest only or principal & interest loan? The list goes on and on…
With your records gathered in advance, and know-how of different financing options, the process of finding the best financing for your new home based on your unique needs will be faster, easier and more efficient. Contact Mitesh for a FREE no obligation consultation on 03 8390 5855 or email mitesh@thinkandgrowfinance.com.au