Make sure you consider these 7 checkpoints when buying property!
1) Bigger deposit, better position
While some lenders can offer loans to buyers with a deposit of 5% of the purchase price, saving around 20% can offer you big benefits:
• Access to a wider pool of lenders and products
• You need to borrow less money overall
• It’s a clear sign to potential lenders that you’re good at managing money.
(Remember in ‘bank speak’ deposit available refers to cash after payment of purchase costs.)
Don’t panic if you are short! With low interest rates the deposit size is the primary affordability problem in 2021, and yes, we have multiple potential options and solutions to this dilemma.
For many a 10% deposit will be the key number to aim for.
Working through the options correctly can save you tens of thousands of dollars.
2) Know your credit rating
Lenders use your credit rating to judge whether your circumstances are suitable for a loan. Credit file history is closely linked to the success of home loan applications, so understanding what makes up and affects your credit rating is important for any homebuyer.
Recent changes to what is reported on your credit file, including a 2 year record of any late payments on debt, has this more critical than ever. It is important to remember banks want to see evidence you make debt repayments on time.
Request a copy of your personal credit file (not just your score) and review it. Go direct to mycreditfile.com.au, look for how to order your report for free.
3) Work out what your bottom line looks like
You need to work out how much you think you can reasonably borrow and convert that to your maximum purchase price. You’ll need to take interest rates and the various fees like stamp duty, legal fees and LMI into account.
You should also think about your current situation, your income and expenses, any dependents (kids or parents), and any lifestyle changes you can see coming up – like a job change or starting a family.
Think about what’s likely to happen in the near future - as well as how it is right now. (Yes of course we help with that!)
Checkpoints 4-7 will be in the Dossier next month.
Buying a home is a long-term commitment and investment, keep these tips in mind to help get it right!
If you’d like more information talk to us today.
Daryl Borden, your Dingley Village Mortgage Broker
Ph. 0417 593 893 ACL 392184
Integrity Finance Australia - Changing Lives