OCTOBER
2019
LAURUS
LAURUS ADVICE: GETTING APPROVED FINANCE FOR NEW BUYERS www.laurusprojects.com.au
OCTOBER 2019
GETTING APPROVED FINANCE FOR NEW BUYERS WE’VE PUT TOGETHER SOME TIPS TO HELP GET YOU BEST PREPARED IN GETTING FINANCED FOR FIRST HOM BUYERS.
With interest rates at an all time low, and
Phil Mikhail from Mortgage Port believes
expected to potentially drop further, it’s no
getting a loan from a bank is now more
wonder
up
complex than it was prior to the introduction of
whether buying now is right for them. Getting
Responsible Lending Lending legislation. Banks
out of the rental market and having a
are doing more in-depth due diligence on
property to call their own is important for
borrower’s expenses and looking for borrowers
many but getting the finance for a home loan
who understand where and how their money is
isn’t as easy as it seems.
being spent.
more
people
are
weighing
OCTOBER 2019
It is that due diligence where a lot of people are
Phil Mikhail suggests that “for borrowers, it is
tripping up on when they apply for a loan.
essential to have a good understanding of
Whereas in years gone pasts, banks may not
where you spend your money. Prior to seeing
have been too concerned about a late payment
your bank or broker, put together a budget
here and there, now, they are checking whether
which will give you a better understanding of
and
your household expenses”.
how
regularly
you
use
services
like
AfterPay, ZipPay and Uber, as well as your credit history and whether you pay your bills on time.
Expert Advice is Essential
Lenders also want to see good savings in your
When considering purchasing a home, it is
bank account that proves you can live within
always a great idea to gain expert advice,
your means. This is all on top of the minimum
whether that be from your accountant or your
10%
require
broker, or any other professional within the
borrowers to have before they even think of
field. If you are using a broker, you need to
getting a home loan.
choose someone who has plenty of experience.
deposit
that
many
lenders
It is only after understanding that the lending
When asked about multiple enquiries, Phil says
criteria
that “ prospective borrowers should obtain a
for
banks
have
now
dramatically
changed, that first home buyers or those buying
copy of their credit file through one of the
their first investment property start to wonder
credit agencies such as Equifax. Too many
whether it’s worth it, or whether they should
credit enquiries are not a good thing to have on
just keep saving for a little while longer.
your credit profile. It is certainly encouraged for borrowers to be aware of what is on their credit history and what might hurt their chances at
Getting Your Budget Right
home finance.”
We’ve all heard how beneficial it is to do a
Why a broker over a bank? Bank home loan
budget. Done well, we know where our money
experts tend to advise new buyers that they
is going and where we can cut back when we
need at least 10% deposit, and in this current
need to. But when buying a home, first home
climate, some new home buyers are needing to
buyers need to establish whether they can
find up to 30% deposits. A company like
afford not only the mortgage repayments, but
MortgagePort, will help you find a home loan
rates, water, insurance and maintenance on top
that suits your needs as a borrower rather than
of their everyday living costs.
solely suiting the lender’s policy, which is what you would typically get from a major bank.
OCTOBER 2019
You may well find that you don’t need a 10% deposit; in some circumstances, such as buying off the plan, you can sometimes pay as little as 5% up front, and then the remainder of payment on settlement. This can work both for and against a new home buyer – the longer lead time between deposit and settlement gives you more time to build up funds (which means less borrowed from a lender). On the other hand, finances can change quite considerably in that time, and you may find that you can no longer service the loan. This is where an experienced broker can help, ensuring you can still qualify for a loan long before settlement date. Similarly, a 10% deposit may not be necessary with a family pledge. For example, parents can help out their children by putting down family property as the deposit or equity for the loan. Again, the need for someone reputable giving sound advice is critical in understanding exactly where you sit and what you can do to purchase property. When you’re considering purchasing your new home, make the time to speak with an experienced broker who can give you the information you need to help you get into your new home sooner. Even if you’re just starting to think about buying, the earlier you talk to a professional, the more prepared you are going to be, and this will only make you better off in the long run.