The world of mortgages can be intimidating, especially if you are a first home buyer. There are so many banks and lenders all offering different home loans to suit different people. What suits your family will not suit someone else’s and whilst you may do your everyday banking with one particular bank, their home loan offerings may not work for you and your current situation.
Buying a house is the biggest decision of most people’s lives, especially the first time around and it’s something you want to get right. Being locked into a mortgage that doesn’t suit your circumstances could be a financial disaster and if you are applying with lenders that don’t work for you, you will be getting knocked back unnecessarily.
Here are our top five tips for successfully getting a mortgage without all the stress.
- Find a GOOD broker. There are lots of mortgage brokers out there who can access many different lenders offerings and find something that is perfect for your family. If you meet a broker and aren’t happy with what they offer, find another one and another one and another one if you have too until you find one that you trust and are happy with. Your broker won’t just help with the initial loan either, they can contact you regularly to see if what you have is still working for you, help you with refinancing or help you make a decision about your options at the end of a fixed interest rate period.
- Don’t try to hide anything. Our lives are an open book nowadays and applying for a mortgage is no different. Attempting to hide things will only leave you heartbroken when the bank finds out and denies your application
- Government incentives. Know what you are entitled too, as a first home buyer there are some great financial incentives that could mean you have to save less money like reduced stamp duty and first home owner’s grants. Check what is offered in your state.
- Have a good history. The bank will want to see that you can be responsible with your debts and can save money. Spend some time before your application cleaning up your finances, paying off small debts like credit cards and keep your savings growing, even if only by a little. The bank will also be interested in your work history, if you plan on applying for a mortgage you need to have had stable employment for a minimum of six months, twelve months for some lenders, so don’t change jobs before applying for a loan.
- Be prepared before you start. Before you get a mortgage you will need to tell the bank your income, savings, assets, place of birth, citizenship status, relationship status, drinking habits, underwear colour, origin of that scar on your arm… you get the idea! Be prepared with everything you think they might need in advance so you don’t have to spend days running around obtaining documents. Have things like passports, drivers licences, marriage certificate, citizenship papers, birth certificates, payslips for last six weeks for all applicants, credit card statements, other loan statements and the previous year’s tax returns.
There is a lender out there for nearly every circumstance, so don’t be discouraged if it doesn’t work out perfectly after the first enquiry. You need to be perfectly comfortable with your choice, it is a lot of money you’re talking about.
Do you have any great tips to help with applying for a mortgage, perhaps ways of alleviating the stress? I know I stressed during my application!