Saving up for your first home can seem like a long and difficult process and then once you finally get there, then you have to decipher finance and property jargon. Then you have the task of searching the market to find the right home loan. Do you go with one of the big 4 banks or a smaller lender? What flexibility can you have or want in your home loan?
One of the most exciting times for a young Australian can soon turn into one of the most stressful, but with our simple tips and a good broker, that stress will soon fade away.
1. Know what you are working towards – how much deposit will you need?
Before doing anything, it is advisable that you figure out what your end goal is. How much will you have to save to get your home loan? A mortgage broker will be able to assist with this and let you know what requirements you will need to meet and tell you exactly what deposit you will need.
2. Get pre-approved.
There’s nothing more heartbreaking when shopping for your first home than finding your dream home, realising you can afford it, by the time the lender approves your finance, the home has been snatched up by someone else who already has their finances in order leading to a quicker formal approval. This is where pre-approval comes in, the lender will advise you how much you can borrow and provisionally approve you for this amount, so when you find the house you want, you can put in an offer knowing it is within your budget and your approval time will be much faster.
3. Save regularly for a period of time.
One of the most important things the lender will check when deciding whether to grant you finance for your home loan is your savings history. How much savings do you have? How frequently do you contribute to this savings account and how long have you been saving? The longer you can show you have saved the money, the better chances you have of widening your options with home loan packages as this will show lenders you have the discipline and funds to repay your home loan.
4. Use a mortgage broker.
There are several reasons why this is a good idea. For one, brokers can help make looking for products a lot easier because you could get loan comparisons from different lenders by simply talking to them–you no longer have to approach lenders individually, which could take a lot of time. What’s more is that they can help you find a product that suits your needs because they take into consideration your personal circumstances and your preferences, whether you want a product that you can pay off sooner, or flexibility to access extra repayments that you have made when needed.
Get in touch today about your options as a first home buyer and look forward to owning your own home without the stress and worry of finding the most suitable home loan package for you.
Written by Duncan Pearce.