Almost 35% of Australian citizens have a mortgage. A mortgage is a way most people in the world can afford their own homes. However, the process of getting a mortgage and buying a home can seem a little daunting.
This is where a mortgage broker can come in handy. A mortgage broker can oversee the process of getting a mortgage for you, which reduces the stress of buying a new home. To find out more about the process of getting a mortgage, check out the information below.
Creating A Savings Budget For A Deposit
Many mortgage lenders require a percentage deposit for a mortgage. It can be as little as 10% or as much as 30% depending on the kind of mortgage you are approved for. One way or another, it is important you have the right amount of savings before applying for a mortgage.
Research the interest rates of mortgages to know what you may be paying back every month. Then, simply start saving. Make a plan to save enough money for a deposit in a certain time frame.
Getting A Pre-Approved Mortgage
It is important to get pre-approval for a mortgage before you make any kind of offer. A pre-approval shows how much money a lender is likely to let you borrow to purchase your house. The amount is usually based on your income and credit score, as well as your spending habits.
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While you may wish to go straight to a lender, a mortgage broker might improve the likelihood of getting pre-approved. They can look at your income and savings and predict if pre-approval will is likely and/or how much money a lender may let you borrow.
Finding Your Dream House
This is the most exciting part for any new homeowner. Once you have been pre-approved, you can start house hunting based on the amount a lender will let you borrow. Real-estate agents will want to see your pre-approval confirmation before they let you make any kind of offer on a house.
Consider what you want in a home right now, and what you may want in the future. Will you want to start a family someday? Or would buying a big house put you at a disadvantage when you reach old age?
Ensure you consider your future thoroughly before making an offer on a new home.
Getting The Right Mortgage Lender For Your Needs
Once you have made an offer on your new home, you will want to find your mortgage lender. A mortgage broker can help hugely during this process. A mortgage broker will have good access to different types of lenders and can recommend one to you based on your circumstances.
While it’s fine to remain with the lender that gave you your pre-approval, it’s also a good idea to research others. This is the best way to look at all the fees you will need to pay your lender, as well as the different types of mortgages they may offer.
The Process Of Applying
Some of your mortgage application is completed when you submit your pre-approval application. To complete a full mortgage application, there are some final but very important steps to finish off.
Documents you may be asked for include tax returns, an updated and accurate copy of your income, and a declaration of any assets you may hold. What your lender requires is specific to them, but they will ensure you know what you need to provide when you borrow with them.
A mortgage broker can be a real asset to you during the final stages of your application. They will help to clear up anything you don’t understand and work to make the entire process more simple.
Home Inspection And Appraisal
While a home inspection isn’t a necessity, it is a very good idea. Any structural issues with your home that may not have been obvious during the viewing will be discovered during an inspection. This means repairs are easily organized before you move in.
A mortgage broker can put you in touch with an inspector. Following an inspection, your home will also undergo an appraisal. This will let you know the value of your house independently and will ensure you are not overpaying for it.
The Underwriting Process
Mortgage underwriting refers to the procedure through which your lender evaluates the risk of extending credit to you. This might take a little time, as there are a few things lenders must consider in detail before deciding to offer you a mortgage.
During this time, a lender may ask for a reason behind any current credit concerns you still have. Answer these queries quickly and in as much detail as required to move the underwriting process along as fast as possible.
An underwriter looks at three main components of your application; capacity, credit, and collateral. Capacity refers to your ability to pay back your mortgage based on your income.
An underwriter will look at your credit score to ensure you pay your debts responsibly and on time. Collateral simply means your property is worth enough to act as security for your loan.
The Final Step: Closing
This is the moment you’ll have been waiting for and dreaming about. When it’s time to close, the property becomes yours and you are officially a homeowner.
Your lender will provide you with the necessary closing documents. You will usually have to sign a lot of different papers, but you will be given thorough instructions by your lender on how to do this.
The closing process is the final step on your mortgage journey. However, if you do have any questions during this process, simply reach out to your lender or your mortgage broker.
Getting A Mortgage Is Easier When You Know How The Process Works
Getting a mortgage is a tough and lengthy process. However, it is worth it if you end up with your own home and affordable payments. A mortgage broker can help make the whole process easier.
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