Things to consider before applying for a Home Loan

Things to consider before applying for a Home Loan

Now that you have decided to purchase your home you may be thinking about how you are going to arrange the finance. Contrary to public opinion obtaining a home loan is easy just as long as you know what to look for. If you are at a loss on how to proceed here are things you should consider before applying for a home loan, alternatively call us and we can arrange everything for you

Types of Loan

Loans come in different shapes and sizes which can leave you feeling confused on the choices you need to make. To make this easy for you here are the two main types of home loans available in Australia:

·      Standard loans: They have more features than basic loans and also have a flexible repayment plan.

·       Package loans: They combine home loan with financial products like credit cards, they are also the most expensive.

For more details on types of loan click here:

Your Lender

The type of lender you choose can either give you a good deal or totally ruin your home purchase plans. This is why we recommend that you invest time in learning about your potential lender's or you can call us, and we can take you through this in a much easy way.  Also, your preferred lender should not have any issues giving you access to funds from various financial institutions. It is important that you choose a lender that will suit your needs.

Interest Rates

Before you apply for a home loan you should consider the interest rate. The interest rate is the percentage your lender will charge you on the amount of money that you wish to borrow. There are three main options in Australia namely:

·       Fixed Rate: With this type your interest rate is fixed for a certain period of time, usually one to five years.

·       Variable Rate: Your interest rate is not fixed but rather it changes throughout your loan's duration.

·       Split Rate: Using this option gives you the best of both worlds. This means that part of your loan will have a fixed rate while the remaining part will have a variable rate.

Size of Loan

Another area you should consider before applying for a home loan is the size of the loan. You should determine how much you want to borrow from your lender. To help you make this decision there are 4 basic factors to examine, which are given as follows:

·       Size of deposit

·       Value of property

·       Extra mortgage costs

·       Repayment ability

Eligibility Criteria

Banks and lenders will want to access your eligibility before giving you a loan. They do this by looking at your credit report which contains your entire financial transactions both negative and positive. Don’t be alarmed when you are informed that there will be a credit history check, your lender just wants to know if you can repay the loan. We can check your eligibility criteria and prepare you for home shopping.

Application Fees

To avoid application fees when applying for a home loan please contact us on 0431515916    as we know which lenders do not charge these fees. With careful research we can help you meet with lenders with little or no fees. However, if your chosen loan has an application fee feel free to negotiate with your bank to have it waived, or we can request this on your behalf.

Conclusion

Getting a foot in the Australian property market can appear a daunting task, however when you are prepared for what is to come the process of owning your dream house will be amazingly simple and stress-free.