If you are in the market to buy a new property or a house, you are likely in need to borrow a sum to fund it. Finding out whether you can source a mortgage or not is a defining moment in most of our lives. While negotiating for a mortgage in the first place itself is daunting for many, having to renegotiate for one is absolutely a nightmare.
However, if you tread carefully, there are a few ways that you can use to secure the mortgage with an interest rate that works for you the first time itself. So while you think about the beautiful home designs, here are a few tips to ensure that you get accepted for a home loan.
1. Get a Head Start
Starting as early as possible to shop for your mortgage might work out in your best interest. Start at least four to six months prior to the renewal or the time you are hoping to get the mortgage, This offers a longer period of time to see whether the rates go high or down.
If you can get the lender to hold the rate for a period of time, if the rates go down, they will honour the lower rates for you even if the interest goes up.
2. Save For the Biggest Deposit
Lenders usually provide lowest interest rates for those with large deposit amounts. The top deals in the market are offered to buyers who can put down an initial deposit between 35% to 40% of the properties estimated value. Consequently, those who put down only 10% will have to pay higher interest rates.
In conclusion, try your best to save up as much as you can for the down payment. It will get you the best interest rates.
3. Do your Homework
Even if you are hiring a mortgage broker, it will work well for you if you are aware of at least the basic aspects that determine your mortgage amounts. Start by checking the types of lenders and what rates each of them offers. Today, all this information is available online and anyone can quickly find out the market rates out there in Brisbane.
This will put you in a better position to negotiate with the lender.
4. Find out Your Credit Score
The homework part does not confine to finding out about the lenders alone. The buyer should also be aware of their own financial situation. To avail the best mortgage deals, you should have a good credit score. Though it is indeed possible to get a mortgage by having a bad score, it certainly influences the interest rate.
You can find out your own credit score using several online tools. This will give you a better understanding of what you can expect and thus help to avoid any unpleasant surprises or inaccuracies.
5. Close Unused Accounts and Debts
While looking at the credit score, lenders will factor in the amount of credit available to you and also the amount you owe to others. If possible, try to clear as much of your debt you can before applying for a loan. Also, close any accounts that you no longer use. All these are aspects that worry the lenders on your ability to repay the mortgage.
6. Avoid Unusual Properties
The more challengers a property has, the more difficult it is to sell it. This is much similar to drafting house plans Brisbane in a very unusual property that is so far to reach or any other factors that might make it less desirable. This will make the lenders more cautious while determining interest rates. Difficult properties are best avoided if you are hoping for lower interest rates, residential properties situated above commercial enterprises such as cafes and bars, old buildings and houses built against the regulations, and with rare materials will all fall under this category.
7. Prepare All the Documents
No lender will take you as a customer if you do not provide all the necessary documents. They will not even take you seriously if you are not prepared with the up-to-date documents, including proof of your income and addresses.
You also need to make sure that the address in all official documents are up-to-date. The other documents required include bank statements and payslips. If you are self-employed you will need to provide the source and proof of your income. Self-employed people might be asked to provide more documents regarding their income compared to those with full-time jobs.
If you are eligible for any other support from the Government or receive any other income such as Child Benefit, you also need to provide the necessary proof of this.
8. Know What Kind of Mortgage You Want
There are different types of mortgages available in the market. Similar to the different options new house builders Brisbane will present you, lenders can also offer you different mortgage plans. There are choices of flexible interest rate and fixed interest rate or plans with interest starting low and that rises based on the market rate.
Consider your financial situation while choosing the mortgage payment, If you think the plan they offer does not suit you then it is best to approach someone else.
9. Hire a Mortgage Broker
It is possible to feel overwhelmed when looking at the many possibilities and things that could go wrong while looking for a mortgage, If you do not think you can handle it yourself, it is always recommended to hire a professional. Like a good licensed builder, a mortgage broker can also assist you from curating the necessary documents to completing the final transaction of the loan amount.
They will also help you choose the best plan and make deals with lenders to get you the best possible interest rates for your loan amounts.
With the help of TrustCo, you can easily find the best mortgage brokers in Brisbane. We can also provide you with the best designers and Brisbane builders list to complete your construction with the best team.