A mortgage application serves a simple purpose: to help the lender decide whether to lend money to the borrower. Securing finance to purchase a property can be difficult, which is why it is essential to make sure your application is error free. Below is a list of guidelines to follow, or you may want to get the help of a local mortgage broker.

Be honest about your financial position

One common reason that mortgage applications get declined are missed bill payments. A potential borrower’s credit history is closely scrutinized by their chosen lender. Any overlooked bills can be costly.

Make sure you declare all your expenses

Forgetting to mention that emergency credit card is also a common problem and one that can derail an application.

Employment woes

Lenders like borrowers who have a relatively stable recent employment record for at least six to twelve months or more in your job, receiving regular income. For instance, if you are looking to change company at the same time you are looking to buy a property, reconsider one or the other, stay in the same employment at least until you have the mortgage. If you are determined to change jobs, ensure you have enough money saved to cover mortgage repayments and lifestyle costs .

Knowing your limits

It is all too easy to get caught up in hunting for property without knowing exactly how much you can borrow. You can avoid disappointment and/or losing your deposit by seeking out a loan pre-approval before looking for property. These are usually valid for three to six months.

Not knowing lending criteria

Lenders and the mortgage insurers behind them work to a wide range of criteria when deciding whether to approve a home loan. They often have restrictions around property sizes, postcodes, high density buildings and an assortment of other aspects. For example, many lenders put restrictions on the maximum amount they will lend on properties in regional towns, meaning you may need to come up with a larger deposit, perhaps more.

Not getting the right loan structure

A mistake many people make is they look for the lender with the cheapest interest rate and then try and change their position to fit that lender’s policy. Getting the right loan in the first place is particularly important for investors, who often need to make use of loan features like offset accounts and redraw facilities  and can save you from costly interest payments and refinances further down the track.

Purchase cost pain

There are a wide range of purchase costs in addition to your deposit, including, lenders mortgage insurance, stamp duty, legal costs, application fees, solicitor fees and inspection fees.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders.

In addition to the two standard means of setting the cost of a mortgage loan (fixed at a set interest rate for the term, or variable relative to market interest rates), there are variations in how that cost is paid, and how the loan itself is repaid. Repayment depends on locality, tax laws and prevailing culture. There are also various mortgage repayment structures to suit different types of borrower, see more : http://www.mortgagebroker247.com.au/businessloans/

 

 

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