LAURUS ADVICE: Getting Approved Finance for New Buyers

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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.


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