How to get that loan!

Are you planning on buying a new property this year and need to get a loan secured? You may be aware that mortgage and lending regulations are changing in Australia meaning it takes that extra bit more research and preparation to get a loan successfully approved.

Here, we list down our top mortgage planning tips to think about this year.

1.Work on your credit integrity

Your credit profile can make or break your relationship with a lender. Ask any mortgage broker and they will tell you how your score will affect your chances of approval. Make sure you manage your debts properly.

Pay your bills on time and address your outstanding balances by at least settling the minimum. Lenders have a debt-to-ratio income requirement depending on the institution.

2. Save the deposit

Most lenders will require that you have a 20% deposit ready. Having a decent deposit saved is a good way to demonstrate your ability to repay your debts and an excellent sign of security. It also gives you considerable equity in the property.

3.Secure a loan pre-approval

Getting your loan pre-approved tells you how much money you can borrow to fund your property purchase even before you start looking. It is usually valid for a 3- 6 month period.

Knowing this upfront saves you a lot of time as it allows you to start looking for properties within the right price range and gives you a level of confidence that your final loan will be approved without any issues.

4. Work with a good local mortgage broker

A good mortgage broker is key in helping get your loan approved and over the line with no issues, especially with today’s lending complexities. Once you find the right property, they will also be there to meet important contract and loan settlement deadlines as well as helping you find the best loan solution on the market. They take a personal approach in matching you with the right solution and can save you a lot of time and money in the process.

If you don’t know a mortgage broker in your local area, contact a few before you start your property search and understand how they can help you.

5. Understand different loan types and match with your lifestyle

Fixed or Variable Interest Rate Options? That’s a hard one and it really depends!

Some homeowners feel more comfortable with a fixed interest rate as they know their exact commitments for a fixed period of time. Others feel more comfortable with a variable mortgage rate, especially in an economy where trends show an expected interest rate drop.

It could even be a mixture of both. Discuss this with your mortgage broker and understand the pros and cons of each based on your level of comfort.

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