Tips on Australian Home loans
One of the challenges faced by first time home buyers revolves around home financing. There is lots of uncertainty when you are considering taking out a home loan. There is a lot to choose from when it comes to Australia home loans. Your primary objective is to tip the odds in your favour so that you can get a loan approved fast. Here are key tips on Australian home loans to get you approved faster.
Create a budget
Home buying has huge cost implications. It is best to draft a budget before approaching lenders. Once you create a budget, you need to stick to it. Give yourself at least six months to establish whether you have the financial discipline to pay your loan. After this period, you can review your budget to ascertain whether it is realistic or you need to make adjustments. When creating a budget, you also need to decide on the limits. You can use a mortgage repayment calculator with the help of a real estate agent. The budget also needs to factor in upfront costs.
Keep your bank details in order
Australian home loans lenders will scrutinize your bank details before approving you for a Loans.com.au Home Loans. As such, you need to ensure that your bank details portray you as a financially responsible person. This means that you need to take care of any late payments. Also, ensure that you do not overdraw during this period. Lenders may also ask for bank statements dating back to 6 months or even one year. It is also important to ensure that your tax information is up to date.
Pay debts and avoid taking new ones
While the lender will not expect you to have a zero balance on the credit cards, it is best to clear most of your debts. The amount you owe in debts have a huge impact your Australian home loans approval. Lenders use a debt to income ratio when approving mortgages. A high ratio can be turned down. Ideally, lenders insist that your debt obligations should not go beyond 36 percent of your total income. Your aim should be to ensure that your debt to income ratio remains low.
Save money before taking out a loan
The general requirement when applying for an Australian home loans is to make a down payment. You are likely to be turned down for a loan if you walk into a lenders office with no cash. While the housing sector in Australia is improving, lenders are still cautious, and many will not approve loans without a deposit. The minimum deposit amount differs from one lender to another. However, the industry trend among many Australian home loans providers is that most insist on a minimum of 3.5 percent as down payment. It is best to aim for a higher down payment. A higher deposit can reduce your mortgage balance and eliminate the need for private mortgage insurance.
The above tips on Australian home loans can make an otherwise complicated and strenuous home loan approval process much smoother.