According to the Australian Bureau of Statistics (ABS), the average house price in Australia is $959,300. The average Australian has approximately $37,975 in savings. Because of how expensive houses are, gone are the days of people buying their homes outright. Most Australians rely on mortgages to be able to buy their first homes. If you are interested in buying yourself a house with a mortgage, you need to do everything you can to save yourself money and get the best deal possible. This post will help you with these things, so read on to find out more:
Work with a Mortgage Broker
The use of mortgage brokers has never been more popular. They are experts in home buying whose know-how makes it possible for clients to find affordable, favorable mortgages for their first, second, or third homes. They operate in every city, so whether you need a Brisbane mortgage broker or one in Canberra, you should have no trouble finding support. A mortgage broker will help you to find deals that would otherwise not be available to you. This is because they have exclusivity arrangements with certain lenders and have unique promotional discounts in their arsenal that are unavailable elsewhere.
Check Your Credit Score
Your credit report will influence any loan applications you make. It describes your history as a borrower and gives lenders an idea of what you are like as a person. Poor credit can negatively impact your chances of obtaining a loan. A lot of people make the mistake of applying for mortgages with bad credit. Check your credit report before making an application, so you have time to mend it before you apply. Applying with bad credit will inevitably lead to a denial (unless you apply for a specialist bad credit mortgage), which will cause your credit score to drop lower than it already is.
Save for a Deposit
Most lenders expect a deposit. The amount you give as a deposit further influences your chosen lender’s decision. This is because responsible borrowers typically give larger deposits. The more you pay initially, the less you will have to pay back in the future. If you do not have a lot of money saved up as a deposit, there are options. You may be able to take out a 0% interest loan designed specifically for people interested in buying their first homes, and then use that. Alternatively, you can apply for a no-deposit mortgage with a guarantor.
Use Comparison Sites
A comparison site is a website that weighs up the pros and cons of certain lenders. The information on these websites can help borrowers decide whether lenders they are considering are right for them and allow them to explore their options. If you plan on using a comparison site, there are a few different things you need to know. The first is that some sites are sponsored. A sponsored site will provide biased information, so find unsponsored ones. The second is that the information on some comparison sites is outdated, so try to find ones that are relevant and current. Thirdly, some comparison sites have access to exclusive deals like mortgage brokers.
Don’t Overlook Fees
A lot of people make the mistake of neglecting to factor fees into their budget when they are planning on buying themselves a house. You have to pay your mortgage broker fees, there are typically mortgage application fees, and you have to pay your conveyancer fees. Conveyancers are lawyers who facilitate the property deed transfer process. Before you make an application, sit down with your partner or alone and work out how much you are going to have to pay in fees toward your new home. Working fees out can prevent you from borrowing more than you can afford to repay.
Your Ability to Repay
Keeping in line with the point made in the previous section, you must make sure you can afford to repay your mortgage before applying for it, even if you plan on renting it out. Your income needs to be able to accommodate each and every payment. A lot of people with unstable jobs talk themselves into taking out mortgages they cannot afford to maintain. If you default on your mortgage, you will lose your home. A default is when you miss payments. Missing payments on your mortgage is one of the worst things a person can do. To work out whether you can afford a mortgage or not, calculate incomings and outgoings and work out a budget. A financial advisor may be able to help you to do this.
Stick to a Budget
When you work a budget out, stick to it. Do not borrow more than you can afford or try and buy a house that’s out of your budget just because you like it. Remember that mortgages are a big deal. They are the largest amount of money most people will ever borrow. If you do not stick to a budget, you will end up losing your home, as mentioned in the previous section. Do not borrow more than you need, even if your chosen lender offers you more money than your house actually costs.
Understand the Process
Take time to understand the process of applying for a mortgage, too. Understanding what mortgage applications entail can make it much easier for you to navigate the process. Bear in mind that there is support out there, so you don’t have to go at it alone. As mentioned earlier on, you can hire a mortgage broker. A mortgage broker will be able to work with you to help you to get the most favorable possible mortgage deal. Mortgage brokers are widely available and offer very affordable support.
Shop Around for Houses
Shop around for houses. Do not make the mistake of rushing the process of buying one. Find the perfect house, so you do end up regretting your decision later on down the road. A realtor will be able to work with you to find the house of your dreams. Factor realtor fees into your budget, too. Realtor fees are often between 5-7.5% of a property’s purchase price.
Buying a house can be exciting but stressful. If you plan on buying yourself one, use the guidance given here to get yourself a good deal. Make sure that you consider each point carefully and if you feel that they could be helpful, incorporate them into your mortgage plan.