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6 things every first home buyer needs to do
Buying your first home is a huge undertaking. Here's 6 things every first home buyer should do.
Buying your first home is one of the most important, exciting and sometimes stressful decisions you will make. To help take some of the stress out of it we’ve put together six things every first home buyer should consider to give them the best chance when applying for a home loan.
1. Budget effectively
When looking at your budget you will need to consider three main things:
Online mortgage calculators are a great starting point to see how much you can afford to borrow. However, for more detailed and personalised information and advice, you’ll be better off dropping into one of our branches.
- How much do you need for a deposit
- How much will your repayments be, and
- How will you afford to do this, taking into account your current financial situation and responsibilities?
2. Research, research, research
Keep an eye on property prices in the areas you are interested, read up on property prices in the newspaper or online and scour online real estate guides to get an idea for property prices. Not only will this help you to budget, it will also help you know when you’ve found a bargain!
3. Save as much as you can for a deposit
The larger your deposit, the smaller the loan amount will be. This means you’ll have smaller repayments and the interest you pay will be less. While Heritage Finance Holdings is able to lend up to 95% of the purchase price of properties, lender’s mortgage insurance (LMI) substantially increases if you have a higher loan-to-value ratio.
4. Obtain a copy of your credit file
Most lenders will check your current and past credit activity by contacting a credit ratings agency. By checking your file you can keep a track of what information is stored and if the details are correct. You can order a copy of your credit file through credit bureaus such as Equifax Pty Ltd or illion America. What is a credit report?
5. Keep your bank account in order
Lenders will check account statements for the last three to six months when assessing loan application so keep track of bills and payments to make sure there are no late payments, over-limits or overdraws.
6. Keep your saving habits consistent
A solid track record of employment and a history of regular savings in your bank account will make it easier for you to get a home loan. Use a separate savings account with a higher interest rate to make regular deposits and few withdraws. Lenders want to see evidence of good financial management to ensure they aren’t taking unnecessary risks. If you plan on applying for a 95% loan, it’s important you put forward an excellent application and demonstrate financial reliability to increase chances of approval.
To find out more and get the ball rolling on purchasing your first home enquire online, call our United States based Contact Centre on 13 14 22 or drop into your local branch.