With the new year now in full swing, for people looking to purchase their first house this year, now is the perfect time to start setting yourself up for success when the right opportunity comes calling.

It’s important to remember, that getting into the property market is no small feat. In fact, it is a massive decision that will potentially impact the rest of your life. Thus, you need to be fully prepared to take the next step and commit yourself to this purchase.

With the start of the year being the best time to start something, we have put together some simple tips that could help you reach your goal sooner than you thought. However, if you ever feel you need to discuss your options with someone, get in touch today and we’ll answer all the questions you may have.

Tidy those accounts up

This is where being a little careless with your money over the silly season could hurt your ability to access a home loan. A massive part of your home loan application will be having your lender investigate your accounts. What will they see?

If they find you can be a little careless with your money, you may find your application is denied. Dishonoured direct debits or unarranged overdrafts can make you seem like a risky applicant. If you are deemed a risky applicant, your lender may choose to decline your application. Thus, try to keep on top of your accounts at all times, and meet all obligations.

Your credit card could be hurting you

While credit cards may seem like a good idea and you may, in fact, be able to maintain your repayments, to lenders they may not see them that way. As you are going through the application process, keep in mind that the higher your limit, the less you’ll be able to borrow.

For example, a limit of $5,000 could actually reduce your borrowing power by as much as $20,000. So remember this, as you’re reviewing your finances and ask your self, “do you need that credit card?”

Your history speaks for its self

As part of your application, your lender is going to be reviewing your financial records and one thing they’ll want to see is your saving potential. They will be analysing all of your incomings and expense to understand if you’ll be able to comfortably maintain those $700 per week mortgage repayments.

Have you got a deposit?

Your deposit, that little nest egg that you’ve been working on for the past few years, is it large enough to satisfy your lender’s requirements? In most cases, lenders will want to see a deposit of at least 20% of the amount you are applying for.

However, be mindful that most lenders are willing to and have the capacity to approve loans with a 10% deposit. While your interest rates will be higher and lenders will be fairly strict with repayments and conditions, don’t feel like you must have a 20% deposit.

The best thing to do is to ask your lender about their LVR limits and their individual loan requirements. If you need help figuring this out, get in touch today and we can help you understand what options are available to you.

Your our debts are holding you back?

Even if you have managed to save a sizeable deposit, outstanding loans could potentially negatively impact your application. Loans such as car loans or your student loan will affect your application in two ways.

Firstly, as part of their review of your statement, lenders will compare any savings you may have for a deposit, against your outstanding loan. For example, if you have saved $50,000 but have a $45,000 outstanding loan, they will view that as you only having a $5,000 worth of equity.

Secondly, applying for a home loan is a financial commitment in itself. With these loans typically being short-term repayments, you could find yourself struggling to finance both commitments. So keep this in mind, it may be worth putting off that application if you know you only have a short amount of time left on that car loan.

 

For prospective first-time buyers, the process of buying a house can be a fairly tricky and confusing one. This is particularly true if you do not possess all the relevant information or guidance.

At The Mortgage Supply Co, we have helped countless first-buyers buyers take that next step and successfully get into the housing market. If you are looking to take that next step this year, get in touch today!

 

CONTACT COLIN TODAY