Buying a home or apartment is an exciting milestone and there’s a lot to consider from deciding what you buy, getting finance, making an offer, and settlements.
Organising your finances and applying for lending plays a monumental part of buying a property and it can sometimes be stressful if you’re not prepared.
Gold Coast mortgage brokers, Signate Lending Services, assist with managing the process for you from navigating the choices, negotiating on your behalf and ultimately find the right loan for you.
“When preparing for a mortgage, it’s important to remember that lenders want to see a stable financial situation. This means having a steady income, a low debt-to-income ratio, and a good credit score,” Signate Lending Service’s Practice Principal and Finance Broker, Andrew Stevenson said.
“When it comes to finance applications, having a good credit score is critical. It can mean the difference between being approved or declined for a loan, or even impact the interest rate you’re offered. Any coding other than 0 on a credit file is a red flag for lenders, Mr Stevenson said.
By following these tips below, you should be closer to owning your dream home.
1. Maintain good credit score
Your credit score plays a crucial role in the lender’s decision to grant mortgage finance. It’s essential to have a good credit score to get favourable loan terms. To maintain an excellent credit score, pay your bills on time, keep your credit utilisation ratio low, and avoid taking on unnecessary debt.
2. Save for a down payment
Lenders usually require a deposit payment on a mortgage, and the amount required can vary. Saving for a down payment can demonstrate your ability to manage your finances and make it easier to secure mortgage finance. Aim to save at least 20% of the house or unit price for the deposit payment to avoid lenders mortgage insurance and secure more favourable terms.
3. Reduce your debt-to-income ratio
Debt-to-income ratio is the percentage of your gross monthly income that is used to pay your monthly debit. Lenders look at your debt-to-income ratio to assess your ability to repay the loan. It’s essential to manage your debt responsibly and reduce your debt-to-income ratio to increase your chances of getting approved for mortgage finance. Removing unwanted or unused credit card limits can make a significant difference.
4. Get pre-approved for mortgage finance
This is an excellent way to show sellers that you are serious about buying a home. Pre-approval is as close as you can get to confirming your creditworthiness without a purchase contract. It also shows your ability to obtain mortgage finance and helps you understand your budget range. Pre-approval can help speed up the home buying process and make it easier to negotiate with sellers. Getting pre-approved for a home loan can be done online or at a bank and can sometimes even be confirmed within a few days.
5. Work with a mortgage broker
Working with a mortgage broker can be beneficial when securing mortgage finance. A mortgage broker can help you navigate the complex mortgage market and connect you with lenders that fit your financial situation. Additionally, mortgage brokers can help you prepare your financial documents, making the mortgage application process smoother. In conclusion, obtaining mortgage finance can be a daunting process, but following these top 5 tips can make it more manageable.
Additionally, Mt Stevenson said “lenders not only consider your credit score, but also your overall credit history. This includes any outstanding debts, late payments, and other financial commitments such as Afterpay or ZipPay. These services can affect your credit score, so it’s best to use them responsibly and pay off your balances on time”.
Signate Lending Services are leading mortgage brokers, operating on the Gold Coast for almost 14-years. For five years they have been a finalist in the Australian Finance Group’s Excellence Awards before taking out first place in 2017, which is considered the biggest aggregator in the country by volume and broker numbers.
Lacey Group is a boutique property developer and is here to help you secure your dream home effortlessly. Contact us today for more information on mortgage finance. For more news and tips on buying, settlements and what Lacey Group is up to, read more on our blog.
*The information provided in this document has been prepared as a guide and does not constitute advice. Every effort has been made to ensure the information is complete and accurate. The information has been provided in good faith and with due care. The developer and seller of this project makes no representation (expressed or implied) as to the accuracy, adequacy or reliability of any statements, data, images or information contained within. Lacey Group Pty Ltd reserves the right to make changes to the contents of this document at any time. Whilst all endeavours have been made to ensure the content of this document is correct at the time of publishing, the information it contains is to be used as a guide and for information purposes only