Buying a home can be an incredibly daunting prospect. For many people, it is the largest investment they will ever make in their lives. With the Melbourne and Sydney housing markets booming, it is no wonder that prospective homeowners are concerned regarding their chances of successfully applying for a mortgage. Let’s take a look at a few key tips you should consider when applying for a low doc mortgage.
1: Know your spending limitations
Defaults on Australian mortgages are on the rise. Many families and homeowners are struggling to fulfil their mortgage repayments. To avoid falling into this situation, you should definitely spend time reviewing your finances and understanding the limitations on your borrowing.
With over 25 years of experience, Oyster Financial can provide you with sound advice on financing the investment of your home.
2: Know your market
This point is true, now more than ever. The Australian real estate market is in a speculative bubble which has seen housing prices skyrocket over the last decade, particularly in urban cities such as Sydney and Melbourne. Understanding the dynamic nature of house prices will help you to determine the type of loan you should choose and the terms of that agreement.
3: Do your own credit check
When you apply for a loan, the provider will run a review of your credit history. Before this, however, you should verify your own credit score. You may find that there is a long list of enquiries on your credit file, which will ring alarm bells for a prospective lender. Knowing your credit history will ensure that you are prepared for any questions or concerns that the lender may have.
4: Consolidate any existing debts
Any potential lender will be wary of giving you a loan if you have extensive credit debt. Before filing a home loan application, consider consolidating several of your personal debts into a single portfolio. Additionally, many people take out credit cards with credit limits that are far too high. This is an issue as the lender will take the total credit limit into consideration, regardless of how much of it you use.
5: Minimise your personal spending
General budgeting and monitoring of your spending can go a long way in you securing a home loan. One of the worst things you could do is make any large purchases in the lead up to applying for a loan. As a potential borrower, you want to create the image that you are clever and cautious with your money. Any evidence of wayward spending can harm your chances of getting the mortgage you want.
6: Make sure you get the right loan for you
There are a wide variety of different types of home loans available to homeowners and prospective homebuyers. It is pivotal that you do thorough research on the home loans available and make a decision based off your findings.
After reviewing your financial circumstances and goals; Oyster Financial can provide you with recommendations for the best borrowing option.
7: Speak to a professional
As you can see, there are a fair few factors that you need to consider when applying for a mortgage. Speaking to a professional firm like Oyster Financial will help to minimize any worry or stress you are experiencing. One of our financial planners can help assist you with organizing your finances and the actual application process itself.
With such an important decision ahead of you, it is paramount that you put your best foot forward. By making sure you consider the above points, you can ensure that you get a home loan that perfectly suits you.