For most, buying your first home will be the biggest purchase you’ll make in your lifetime, as well as the longest financial commitment you’ll make, withhome loans typically ranging from 15-30 years. For this reason it is important that you choose a mortgage that is suited to your lifestyle and budget. Mortgage repayments will shape your monthly budget and monetary outgoings and it is therefore important to know whether or not you could afford the loan, as well as other expenses. Here are a number of things that you might want to consider when financing for your first home.
Do your sums and work out your budget
First, you need to calculate your actual income versus your regular expenses before you take out a home loan. This will help you determine how much you can set aside monthly for your mortgage repayments. Doing your budget will also help you identify expenses that you could do away with, thus giving you more money for your mortgage.
Shop around before choosing a home loan
It’s also important that you shop around before taking out a home loan. While banks are traditionally the most common place to take out a mortgage, also consider other options available to you such as mortgage brokers.
Working with a mortgage broker can help make the process of choosing a loan faster and more convenient, because you don’t need to go to each individual lender to receive a quote.
When you go to each individual bank to place a finance enquiry, the bank will put a note on your credit file. Going to too many banks about the same finance enquiry will ultimately affect your credit file and your chances of accessing the funds you require. Using a mortgage broker can help you bypass this occurrence, because they will compare each bank’s loan options for you without your name being associated to the request, therefore leaving your credit file untouched.
Boost your chances of approval
Financial institutions are very particular in assessing a borrower’s capacity to pay the loan, especially since a home loan costs a considerable amount of money. They are definitely interested in seeing how you manage your finances, as well as your employment and credit history, so it helps to have a good credit history. Aside from these, it would also be a good idea to ensure you do not make any late payments and always keep up to date with payments due on credit cards, personal loans and even bills. This way, the bank will find it easier to approve your loan application and can possibly offer you a more competitive deal.
If you have any questions or are interested in speaking with one of our qualified mortgage brokers, please contact us for a free consultation.