FIRST HOME BUYERS: tips on applying for a mortgage

All home owners can agree that when it comes to buying your first home, the process can appear daunting at first. Below we have broken down some key steps of the process to get you on your way confidently.

 

 

 

Understand what you can afford to borrow

 

Before you take the plunge on applying for a home loan, it is advisable that you gage an understanding of how much you can afford to borrow.

With the use of our mortgage calculator you should be able to get a rough idea on the weekly/ fortnightly and monthly repayments of your desired loan amount, including your interest. While a mortgage calculator isn’t always exact, it will provide you with a reasonable idea on how much a lender may lend you based on your budget.

However, you will need to take into account, your credit history and ability to service a loan.

___________________________________________________________________________________________________________________________________________________________________________________

 

 

How saving can reduce your mortgage

 

Everyone knows that the higher your deposit is, the less you’ll have to borrow. Not only will that minimise your repayments, but it’ll make obtaining that loan a whole lot easier.

If you aren’t one of those die hard savers and struggle to put away some of your income each pay day, than it’s time to face the fact that you need to make a strict budget. Open up a savings account and make deposits regularly. Not only will you start building an awesome savings account, but it will look good when it comes to a lender assessing your application.

__________

The First Home Super Saver (FHSS)

 The FHSS scheme was introduced by the Australian Government in the Federal Budget 2017–18 to reduce pressure on housing affordability.

The FHSS scheme allows you to save money for your first home inside your superannuation fund, aiming to help first home buyers save faster with the concessional tax treatment of super.

For more information, please click here

__________

The First Home Owner Assistance

The Western Australia First Home Owner Grant (WA FHOG) is a WA state government initiative to help first home owners to get their ‘new’ first home sooner. It is an amount of money paid by the WA government to eligible first home owners.

The WA FHOG is currently at $10,000 for eligible first home buyers purchasing a ‘new’ home.

For more information, please click here

___________________________________________________________________________________________________________________________________________________________________________________

 

Trouble saving for a deposit?

 

We understand that saving a 20% deposit on your mortgage is a trying task.  Luckily, most lenders are on the same page and often won’t keep the 20% rate as a pre requisite to obtain a loan. More often than not, you can grasp a home loan for as little as 5% of the purchase price. The only catch is lenders mortgage insurance (LMI).

LMI is a beneficial thing to add to your home loan; however it will increase your repayments and may affect how much you can borrow.

___________________________________________________________________________________________________________________________________________________________________________________

 

 

Choosing a lender

 

Our number one tip on choosing a lender is to not spend hours on the internet comparing, but to choose a mortgage broker and let them do the digging for you.

As tempting as it can be just going with whom you already bank with, we can promise you that it pays to look around. The mortgage market is competitive and there just may be a better rate outside of your current financial institution.

A mortgage broker has access to a large number of lenders and has an in depth idea on how it all works. Most mortgage brokers offer a free, no obligation service, which evidently saves you time, money and stress finding the absolute best lender and product for your personal circumstance.

___________________________________________________________________________________________________________________________________________________________________________________

 

Pre- approval!

 

Once you’ve worked out the price of what you want to buy and have an idea of how much you can afford, the next step is to get conditional approval.

Conditional approval isn’t formal approval; it is an indication of what you should be able to borrow up to. This will last 90 days and will help you target homes during your property search!

___________________________________________________________________________________________________________________________________________________________________________________