The Person You Can Rely on For All Your Property Purchases

The key to demonstrating that you have the ability to service a loan is consistency in saving. 6-12 months prior to a loan application, it may be time to look at your own spending habits.

Lenders are focused on “income consistency”. This means that having a budget and understanding the direction you need to demonstrate excess cash flow is essential to obtaining finance approval. How much the banks are willing to lend is determined by how much money you currently have as cash flow and what you can repay each month.

Therefore, speaking with a mortgage broker regarding spending and saving habits will allow you to develop a precise plan moving forward in order to move through the financial process of purchasing property, well before you begin all the fun of house hunting!

Did you know that more than half of Australians use a mortgage broker to secure a home loan? One of the most important reasons why is that as a broker, I work for you and have your best interest at heart, unlike banks. I’ll also meet with you first to find out what you need, then use my knowledge of the market to better negotiate with several lenders.

I’ll then review a range of lenders' options before we work out which one is the best fit for you. Additionally, I’ll also take the administration headache away from you by doing all the paperwork, managing the application process, and looking after the loan through to settlement with the lender.

1. Start with living within a budget. Conduct an honest review of all your living expenses and decide where you can cut back.
2. Start saving for a deposit. Most lenders require a deposit of at least 10-20% of the total loan amount. If your loan amount is more than 80% of the value of your property, you will also need to pay a Lender’s Mortgage Insurance (LMI). This is a one-off insurance payment charged by lenders to borrowers who are considered at higher lending risk with less than a 20% deposit of the purchase price.
3. Don’t forget the on-top costs. You’ll also need to have enough saved to pay for stamp duty and conveyancing or legal fees associated with the purchase.
4. Speak to a mortgage broker 6-12 months before you actively go out looking at property. Work out your borrowing potential and what you can realistically afford with regular mortgage repayments.
5. As a guide, a mortgage calculator can be a great place to start, but it won’t take into account all of your personal circumstances or eligibility for a loan. Talking to a mortgage broker will give you a more accurate idea of what you can afford and explain the different types of loans you could qualify for; such as variable, fixed, split rate, interest-only, honeymoon periods, low doc and more. A mortgage broker can also help you check if any First Home Owner Grants or incentives are available to you.
6. Arrange a pre-approval and begin your property search.
7. In any contract you enter, be sure to include a subject to finance as a contract clause to protect you while you go through the formal loan application process. 

Since you got your home loan, chances are that interest rates and features may have changed. Even though most loans are around 30 years in length, most Australians change their home loan every 4 5 years as they refinance for a better deal or if their needs change. Refinancing is a chance to see what’s out there and determine whether your current loan is still the right one for you.

Saving on repayments, consolidating, unlocking some equity, or refinancing to renovate are some great reasons to refinance.

Have you had your current home loan for more than 3 years? Perhaps it’s time to see what else is out there for you. 

If you already own a home that has increased in value, you can potentially unlock equity to help purchase another property. Or, if you’ve yet to buy your own home, you can use the rent from an investment property to help pay the mortgage as your start in owning property.

What’s the smartest way to finance investment properties? This is where there are lots of technical differences between the strategy you choose.

Full offsets versus drawdown loan with redraw, paying interest only, and fixing rates are all deep considerations when applying for investment property finance and can make a huge difference in your future moves with property investment. But be prepared to pay a slightly higher interest rate than an owner-occupied loan for a home that you live in. Speak to me about your options and popular investment financing models