Talk to an experienced professional that you can trust
First home buyers often find themselves inundated with well-meaning advice (much of it irrelevant or unhelpful). But by talking with a mortgage broker, a first home buyer is tapping into a wealth of industry experience and gaining access to home loan deals that aren’t available on the retail market. Dealing with a broker will also save you time, minimise stress and protect your credit score (which will be negatively impacted by multiple rejections). Additionally, when you deal with a mortgage broker you’re protected by ‘Best Interests Duty’, legislation that ensures a broker is always working in your best interests.
Don’t feel discouraged if you haven’t saved a 20% deposit
A 20% deposit is preferred by many lenders, but that doesn’t mean you’re locked out of the housing market if you haven’t yet saved up that much money. Get in contact with a mortgage broker to discuss what other options may be available to you. This could include using with a guarantor, applying for the First Home Loan Deposit Scheme or opting to buy a property sooner with Lender’s Mortgage Insurance (LMI).
Take action to improve your credit rating
A lot of first home buyers aren’t sure what their current credit rating looks like – so the first thing to do is find out. You can apply for a free copy of your credit report through a range of credit reporting agencies. The higher your credit score, the better your application will look to lenders. Once you’ve made sure there are no errors on your credit report (which can occasionally happen) there are steps you can take to improve your credit rating. These include paying down personal debt, paying off your credit card in full each month and making sure all of your bills are paid on time.
Make sure you allow for all associated costs
In addition to your initial deposit, there is a range of other fees that you’ll need to budget for when buying your first home. These may include a loan application fee (a one-off fee that is payable when your loan commences), Lender’s Mortgage Insurance (if your deposit is less than 20%), Government fees (such as Stamp Duty), conveyancer charges (for handling the transfer of sale), pre-purchase inspection costs (such as building or pest inspections) and moving expenses. If you want more information on the costs associated with buying your first home, then get in contact with the team at Professional Lending Solutions. We’d be happy to provide you with more detailed information on how much you should be budgeting for associated purchase costs.