Buying a home is the biggest financial decision you will ever make. Your dream of having a home of your own can be turned into a reality with mortgage. If you make a smart plan for mortgage, it will significantly lessen your burden. So to help you out here are 7 handy mortgage planning tips for 2017.
Before you dive head first into purchasing a home, you have to prepare your finances. Can you afford to buy a home? There will be hidden costs or expenses you may not realise at the time of purchase which can raise the purchase cost, such as stamp duty, legal fees, lenders’ mortgage insurance, land and water rates, home and contents insurance and repairs. Planning your budget will help you get an idea about which home loan you can afford and apply for.
Your credit score plays a big role in getting the loan approved. Before applying for a home loan you have to clear all your debts whether it’s car payments or personal loans. It is important to pay off your small debts on time as well as pay your bills on time. You have to work on increasing your credit’s integrity to increase your credit score.
Save as much as you can, whenever you can. If you want to buy a home, cut out unnecessary and frivolous personal expenses while also managing your household expenses. When you are ready to buy a home, paying a large deposit means you will have to get a smaller amount of loan and you will save in interest as well. Another plus point is that a larger deposit means you will have a lower Loan to Value Ratio (LVR).
LVR is the amount of the loan divided by the purchase price (or appraised value) of the property. Take for example- if your LVR is more than 80%, you will have to pay for lenders’ mortgage insurance, and in some cases lenders will even charge you a higher interest rate on your loan. Simply put, if you save a large sum for the deposit, you will not have to pay these extra costs.
Buying your first home? Find out if you are eligible for the Australian Government’s First Home Owner Grant.
After finalising the budget to purchase your home, choose the type of mortgage you will need. Whether it is Fixed or Variable interest rate, choose one that you are comfortable with. With fixed interest rate, you know what you are getting into, what your commitment will be and for how long. However, you may be tempted with variable interest rate if the economy is expecting a drop in interest rate.
When choosing the mortgage take a good and careful look at all the available options to find the one that suits your needs. Even if you hire a broker, make sure you do some research yourself before signing anything.
If you home loan provider is not an Authorised Deposit-taking Institution (ADI) such as a bank, building society or credit union, from 1 July 2013 the amount a credit provider is able to charge in fees and charges is capped (that is, limited to a maximum amount) at 48% annually (including all fees and charges).
Make sure you carefully read the credit contract and be aware of the interest rates and fees applied to you. This way you will not be surprised by unexpected costs, higher costs and additional charges.
Find out whether a credit provider you intend to get the mortgage from is licensed or not. You have to ensure that the credit provider or credit assistance providers (such as brokers) are licensed with ASIC or be an authorized representative of someone who is licensed.
To see if your credit provider or credit assistance provider is licensed or not, have a look at ASIC’s Professional Registers. You can also call ASIC’s Infoline on 1300 300 630 to find this information.
Always make your repayments on time and up to date. In case if you have hard time keeping up with the repayments, get help. You may also consider changing your mortgage with another one if the current one is not working for you. You can also contact your credit provider if you are having difficulty with debt.
Lastly, contact a trusted mortgage broker for help. The process for getting loan is becoming complex with each passing year. That’s why seeking professional help will give you much relief. Find a trusted and licensed mortgage broker like Fast Repay Home Loan who will assist in getting your home loan approved without any issues. After you decide to buy a house, they will help you find the most suitable mortgage solution for your needs as well as assist you in navigating the process with important contracts, documents and meeting loan settlement deadlines. Receiving help qualified professional mortgage broker means you will save a lot of time and money when buying your home.
Mortgage planning is about considering your future plans, which may include the purchase of a new car, an overseas trip, acquiring additional assets that may involve property or shares. To achieve these goals it is essential you have a plan, so with this in mind Fast Repay Home Loan Mortgage Planners is here to help you out. Call 1300 707 955 or contact us at email@example.com for all your queries or to book an appointment.