THE DO’S AND DON’TS OF GETTING A HOME LOAN

The travel-hungry Generation Y and Millennials are seemingly putting a lot of emphasis on their desire to travel and make the most of their life experiences before settling down. Despite this, the great Australian dream of owning property continues to remain strong. Owning your own home is still high up on the average Australian’s lifelong wish list.

Chances are you are likely to require a loan from a bank to purchase your new home, much like 35% of Australians who have a mortgage. So if home ownership is on your hit list, here are some useful tips to ensure your signature on those home loan documents.

1. CHECK YOUR CREDIT HISTORY

One of the first things prospective lenders will do is to check your credit history. Do you have any outstanding debts? What has your payment history been like? My Credit File can dispatch free credit file reports to you so you can assess your credit history prior to your loan application.

1. HAVE CLEAR FINANCIALS

Your lenders will need a lot of financial information from you. So it is best to prepare this information in advance. Know what your monthly income and expenses are. Have your tax returns ready along with your last two pay slips. Be prepared to answer many expense-related questions with as much information as possible.

1. LIVE WITHIN YOUR MEANS

This is a clincher. Search for a property that is well within your financial means, one that will not stretch your family income to its maximum. Keep your property search within your budget guidelines so you are not swayed by a property that is beyond your upper limit. The bank will quickly know whether you are looking at properties within your limits. So satisfying them straight off the bat will go a long way! 

1. HAVE A DEPOSIT READY

A good savings record goes hand in hand with a good credit rating. Showing your lender you are a responsible saver and have amassed a decent deposit will have you looking more appealing as a potential mortgagee.

1. KNOW YOUR END GOAL

The way your lender will structure your loan will depend on your end goal. Is this a forever home? An investment? These answers will help you to decide on the structure of your loan and the fixed or variable structure of your loan.

The bottom line is to ensure you have all the information you need at the ready and be able to prove your financial stability. From there, happy house hunting!