You would definitely need a home loan to fulfil your dream of having your own home in Australia. Before you go to apply for it, you are expected to be confident enough that you can pay it off on time. Moreover, you need to consider few things for taking a home finance, such as –
You need some savings: You are expected to give some deposit to the lenders before they will give you a loan. If you have some savings, it will be much easier for you to get the home loan. Thus, it is important to save a regular amount of money each month before applying for a home loan.
Employment history: Lenders are much more curious to know about your credit history and expect you to be in your current job for a minimum of 3-6 months. You need to have a steady and reliable income before applying for the home loan.
Minimize your debts: Lenders usually prefers the customers those who have minimum debts. You must pay off all your debts before applying for the home loan. If possible, you must cancel all the credit cards
Reduce the number of finance applications: The lenders will check your credit file before approving for the loan. If the number of finance applications is more, then it may affect your approval.
Do proper research: Do proper research about the type of loan you need, gather the proof of income and the ability to repay your loan.
Compare the home loans: Before applying for the home loans, you must compare them. There are certain online sites where you can research and give feedback to the home loans every year.
Check your credit score and credit history report: Before applying for the home loans, you must verify for any errors on your credit report such late payments. The lenders prefer those with credit score at least 680 or above 700.
Look for a co-signer: If your credit score is not just up to mark, you need to find a highly qualified co-signer. You can also take your time to improve your credit score before applying for the loan. It is the fact that the lower your credit score, the higher the mortgage rate you will have to pay.
Determine your budget: Before applying for home loan, it is very important to determine how much you can afford and can pay comfortably. The total home price includes mortgage interest rates, property taxes, and cost of insurance as well as private mortgage insurance.
Determine how much you can make for down payment: You must be aware that the lenders might expect you to pay at least 10% down payment.
While applying for the first home loan in Australia, you might be uncertain about whether you will be approved for the loan or not. Concerned about that, there are certain tips, which you can consider to avoid rejections of your home loan application.
Avoid applying to multiple banks: For a quick approval, some people prefer to apply for a loan at multiple banks simultaneously. However, one must keep it in mind that if your loan is rejected at one bank, then it can have an impact on your credit score and ultimately it will increase your chance of being rejected at other banks. Therefore, it is much better to have patience and keep waiting for the reply from one bank and then for another.
Consider age factor: The lenders have already set the minimum age limit of 23-34 years and maximum of 60-65 years for applying the loan. If you do not get fit into this age limit criteria, there are possible chances of rejection of your loan application.
Avoid constant job switch: Beware if you are in a habit of hopping from one job to another. IT will surely leave a negative impact on your loan application as the lenders may get idea that you are stable in your job and thus you may not be able to pay for the home loan on time. It is advisable to stick to the organization for at least 2 years. The plans of job change must be considered after the loan approval.
Residential address is on the defaulter list: It will surely affect your chances of your loan approval, if someone from your house is on the defaulter list. It is not necessary that he must be the relative or family member; he can also be your tenant or property owner. You can talk to the relationship manager that the defaulter family member is not at all dependent on you.
The banks nowadays have started keeping the records of various rejected applications in the database. Thus, in order to avoid this, you must avoid applying at multiple banks.