First-time buyers will have been watching trends in property values and mortgage rates with increasing interest over the past few months, keen to understand the optimal time to enter the market.
As an experienced agency, we understand that it’s a challenging time for first time buyers. The nation’s inflation is stubbornly high, causing the Reserve Bank of Australia to keep edging rates higher to cool the economy.
Frustrating as this must be, it’s helpful to understand that property is a high-reward but long-term investment.
Current events will likely be a distant memory in a year or two once inflation is contained and interest rates have returned to levels that reflect the affordability of property.
So, stay focused on owning your own home. Purchasing property will help you secure your future and achieve your long-term goals.
Below, we’ve outlined some guidelines to ensure you can afford a mortgage and achieve one of life’s most important financial goals. We hope you find it helpful.
Restraint is key – Resist big-ticket purchases, as this will either eat into your cash reserves or hurt your ability to borrow for a mortgage if you’ve used credit. Your debt-to-income ratio will influence the size of your loan.
Steady course – Try to maintain the status quo in your lifestyle and avoid adding additional costs to your spending habits.
Career question – Avoid changing jobs in the period before you apply for a loan as lenders like to see a consistency of employment. However, if you have a good career opportunity, take it. However, be aware it might set back your ability to get a mortgage by a few months.
Bank on it – Avoid changing banks or making any undue changes to your financial situation, such as opening or closing a line of credit. Lenders also like to see consistency in behaviour from prospective clients.
Pay on time – Discipline in handling your debts is more important than ever. Pay your dues on time to avoid hurting your credit rating.
Credit checks – Did you know that your credit score can be adversely affected when someone runs a check against you? So, avoid situations where someone, such as a retailer or car dealer, might do that.
No guarantee – Remember, just because a bank has preapproved a loan doesn’t mean it will deliver on its promise. If rates rise while you’re home-hunting, your lender will likely reduce the amount it’s prepared to loan you. So to be safe, shop for a home that is at the lower end of what your lender has suggested they’d provide.