Purchasing your first home is a huge milestone and cause for much deserved celebration. To ensure that achieving this milestone is as smooth and enjoyable an experience as possible, we’ve outlined the steps that need to be taken.
1. Prepare yourself for a huge commitment
A mortgage is a long-term, ongoing commitment that should not be entered into without careful preparation and consideration. As a legal binding document, you need to take care to ensure that the loan is suitable for you.
“Even at the last moment when the contract has been given the green light by your solicitor and a full loan finance has been approved, if there are red flags or any kind of uncertainty, don’t ignore those,” advises Katrina Rowlands, Home Loan Consultant and Partner at Mortgage Success.
2. Surround yourself with a good network
The next step is to seek professional advice. Dealing with an accredited broker is the best way to ensure you secure a loan that suits your needs and unique financial circumstances. In addition to supporting you through every stage of the loan process, a good broker will have a strong network of reliable professionals, including quality conveyancers, solicitors or even agents, that they can connect you with.
“First home buyers deserve the attention of a network of people that really want them to succeed,” says Katrina. “You want to feel confident that you’ve got the best care you can to guide you into the final stage of purchasing a house.”
3. Put your best foot forward
Whether you approach a lender directly or a broker does it on your behalf, you want to provide as much information and paint a complete picture of your current financial standing. While this can take some work, it’s essential if you want to position yourself as an ideal candidate for a loan. Having swift pre-approval for a loan could also help when it comes to securing your dream home.
“If you approach an agent with an offer while already being fully assessed, having your loan pre-approved and a solicitor at the ready for a contract, it is a very different power of negotiation,” advises Katrina.
4. Ask for help
If you crunch the numbers and realise you can’t afford the recommended 20 per cent deposit, there are other options you can explore, such as a guarantor or lender’s mortgage insurance. Again, it’s important that you are informed about the risks and requirements of each of these options, which is why it’s best to seek out the help of a broker.
“Using a guarantor saves a lot of money but it is a huge ask,” advises Rowlands. “Openly discuss with your guarantor well in advance to ensure they understand their obligations.”
5. Take care with the details
Besides the usual proof of income and financial capability, ensure that your identification and supporting documents reflect your correct legal name.
“It is the single most ridiculous thing that occurs amongst first home buyers these days,” says Rowlands. “If your name has a hyphen, make sure that there’s a hyphen on everything.”
Also ensure that you have all the documents that proves good character at the ready. These include rental ledgers, statements of your saving patterns and account transactions.