The number of Australians looking to buy their first home is once again on the rise, with many of them in the market for a home loan. At the same time, research shows Australians trust in banks has slipped to historic lows, leaving many would-be homeowners between a rock and a hard place when it comes to securing a home loan.
That’s why more and more Australian buyers are using a mortgage broker to apply for their first home loan. A mortgage broker can compare the best deals, assess your borrowing capacity, read the fine print of your contracts, and provide support and assistance for the length of your repayment cycle.
For more information on the advantages of engaging with a mortgage broker when buying your first home, read on.
Keep your credit rating safe
When applying for a mortgage, it’s customary for the lender to conduct a credit check. This is done to ensure you have a good history with finances and are in a position to be able to repay the loan you’ve applied for. If your application for a home loan is rejected, it can damage your credit rating, as will any subsequent rejections. Lenders are generally less likely to accept applications from people who are self-employed or only have a small deposit available.
A mortgage broker will be able to help reduce the risk of having your application rejected and your credit rating damaged by letting you know where to apply for the best chance of success.
Advice you can understand
The Royal Commission into Misconduct in the Banking industry demonstrated that many large banking institutions expect their customers to be responsible for noticing any traps in the fine print. Buying a home is one of the largest financial decisions many of us will make, which is why, understandably, many first home buyers may feel intimidated at the thought of translating banking jargon and terms to make sure their chosen lender is giving them a fair deal, and that they won’t be borrowing beyond their means.
A mortgage broker will be able to liaise with lenders, including banks, and provide clarification on the details of every option that is suitable for you. They will make sure that you are aware of the unique features of each potential mortgage product, including cashback, setup fees and interest rates, and how they will influence the overall cost of your home loan.
Realistic goal setting
House hunting is a time consuming task in and of itself, especially if you intend to buy in a popular area where there is heavy competition for every property that goes on the market. In the rush to find the right place, you may end up wasting time hunting for a house outside of your budget.
A Mortgage broker will help you establish your borrowing capacity, as well as assess your eligibility for the First Home Owners Grant and any other incentives and help you apply should it be possible. They can also give you realistic advice on what you can afford in monthly or weekly loan repayments. With this information, you can house hunt without worrying that you’re looking in the wrong places.
There is a lot of legwork involved in buying your first home. Following up with estate agents during the house hunting stage, working with a solicitor, applying for incentives and government grants, and researching different home loans to compare the deals available are all big jobs.
When you engage with a mortgage broker, they will help guide you through the entire process of application and purchase, and will continue to support you for the lifetime of the loan. As well as finding the best possible deals for you, they can submit applications, liaise with the solicitors and estate agents, and communicate with your lender on your behalf.