First Home Buyers Guide from Austral Mortgage
Step 3: Get Pre-Approval
Buying your first home is a big step and finding the right home loan is very important.
You need to consider things like:
• Does the loan suit your long-term plans and needs?
• Will you be able to meet your repayment commitments if you reduce your working hours or your salary?
• Are you planning to start a family? If you are, what financial impact will this have?
• Should you consider insurance to protect you in the event that your circumstances unexpectedly change?
Under the current National Consumer Credit Protection legislation your lender is required to ask you a number of questions in relation to your loan requirements, your current personal and professional circumstances, your plans for the future and whether you have considered appropriate insurance cover.
Your lender needs to have this information in order to ensure that the loan they recommend to you will meet your plans now and in the future . This information is also important for helping your lender to determine that you will be able to meet your loan repayments without any hardship.
What to look for in a home loan:
• Ability to make additional repayments at no extra costs.
• Ability to make repayments via direct debit, ATMs, Internet and phone banking service.
• Ability to redraw funds at any time.
• 100% mortgage offset saving facility, allowing you to offset funds in the savings account against your home loan. This will save you interest and you can repay your home loan sooner.
• No annual or monthly account keeping fees.
• Option of weekly, fortnightly & monthly repayment frequency.
• Ability to re-fix your interest rate at no extra cost.
If you do not have the time to compare different loans with different lenders it is worthwhile utilising the services of an experienced mortgage broker. Austral Mortgage has a subsidiary company, My Choice Finance which has access to a wide range of lenders as well as Austral loan products. A mortgage broker can do a lot of the home loan reasearch and comparison for you.
If you are a first home buyer and you decide to apply for a home loan with more than one lender, the you need to be mindful that all of your credit enquiries will appear the credit reports for each individual application. While this doesn’t have a big impact on the application, lenders are entitled to ask for written confirmation on whether the other loans proceeded further.
Home Loan Application & Requirements:
Once you have found the right home loan, and we hope it is with Austral, like all lenders we will need the following information along with the completed application form:
• Appropriate photo ID
• Income Verification (2 most recent pay slips & last financial year PAYG Summary)
• Evidence of deposit - if your parents or family are assisting you with money towards the purchase, they will need to complete a Statuatory Declaration confirming that the gift is non-repayable.
If you are borrowing funds to cover the costs and deposit, we’ll simply need to know the amount of debt and will include the monthly commitment in the affordability calculations. A home loan is likely to be a 25 to 30 year commitment for most people, so it is imperative not to over commit yourself with too much debt.
Right, now that you’ve collated all the requirements necessary for the initial loan assessment, you are ready to send your application to Austral or your chosen lender. You should then receive a written response (hopefully a Conditional Approval subject to a valuation) within no more than 48 hours.
OK, now that you’ve got your Conditional Approval, it’s time to go home hunting !!!