Applying for your first home loan may seem daunting, but there are simple steps you can take to be as prepared as possible.
Newcastle Permanent’s head of customer lending Greg Hooper shares his tips to help you put your best foot forward.
Saving your deposit
You may have heard that you need a 20% deposit for the property you want to purchase, but that’s not always the case. Government schemes to help you into your first home are more accessible than ever, and it’s well worth speaking to a lender or broker about whether you may be eligible for one. These people are experts in these schemes and there to help you.
Reviewing your spending
While it’s important to plan your future spending, it’s just as important to review what you are purchasing money on now. You may not think much at the time when you are buying coffee or lunch at work, but these are the little things that add up. Take a look through the last three to six months of your account history – you might be surprised by what you find!
Having your documents ready will not only make the home loan application process smoother, they are also critical if you are exploring government schemes. Be sure to have at hand the likes of identity documents, payslips, evidence of other repayments, your budget and savings statements – and make sure your tax returns are up to date.
Having an open mind
While many of us dream of living in a sprawling mansion with water views, this may not be in reach for a first home. Remember, your first home doesn’t have to be your forever home, so do some research into the area where you want to live and be willing to compromise.
Your lender isn’t someone to be afraid of. The relationship you have with your lender or broker should be a partnership, and your first loan interview will be more of an open discussion rather than an interrogation about avo toast and takeaway coffee. Use the opportunity to ask questions and speak up if something doesn’t add up or make sense. If you are thinking it, it’s probably been asked 100 times before.
My greatest piece of advice is “don’t wait”. Speak to your lender or a broker as soon as possible, even if you don’t think you are in a position to buy. By doing this, we can help you be in the best shape possible for when you are ready to apply and put you on the fast track to your first home.
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