If you haven’t organised a loan pre-approval for your first home, then shopping for a house is like walking into a store without your credit card.
When you find your ideal property, you won’t be able to move quickly because organising finances takes time. And that’s terrible news if other buyers are keen to seal the deal.
As a first-home buyer, there’s a lot to learn. Many fall into the trap of believing they should start house-hunting once they have enough cash for a down-payment.
In a competitive market – even in these Covid times when the supply of homes for sale is thin – you’re best served by obtaining a pre-approval for a mortgage before venturing out to discover your dream home.
This way, you can secure your desired property swiftly, rather than watch someone take it away from you because they had their finances organised ahead of time.
It’s a great idea to talk to a mortgage broker about organising a pre-approval, based on the size of your deposit, income and savings record. They’ll give you an insight into a range of loans that would be suitable and will help you with your application.
Best of all, they’ll tell you how much a bank or lender might make available to you. There’s nothing more frustrating than discovering the homes you’ve been visiting are out of your price range.
Below are some tips on using a mortgage broker.
- The services of a mortgage broker are free to buyers. Mortgage brokers earn commission from the lenders based on the loan you select.
- Brokers offer a more comprehensive range of options than a single bank or lender.
- Brokers don’t always represent the same lending institutions, so it’s advisable to meet more than one broker before deciding how to proceed.
- Mortgages costs vary. There are many elements of a loan that dictate its overall cost, including the interest rate and fees. When you’re looking at a 25-year repayment period, the differences can amount to tens of thousands of dollars.
- Experienced brokers will understand your financial situation and be able to give you personalised advice on how to proceed.
- Paperwork is always a hassle, and brokers will work with you to make this task less arduous for you.
- If you have an issue with your credit history, a broker can offer advice on how to mitigate this problem.
- You’ll have many questions as you proceed with a property purchase. Your mortgage broker will always be available to help clarify issues and resolve any difficulties with your financing if they arise.