How first home buyers get a mortgage
Many first home buyers are not sure where to start when it comes to getting their first mortgage.
Most end up just wandering into the bank to ask a few questions and then get swept up into the banks process, end up with an approval but no real advice or understanding of what to do next.
If you have a 20% deposit, its not that hard to get a loan, you could get a pre-approval by just wandering into the bank.
But if you want to get some advice on what you are looking to do, what it might cost, your options and just generally get some assistance through the whole process, then talk to your DUX adviser.
When looking at your first home, you need to start to think about a few things:
1. What kind of house is it?
Is this going to be your dream home or just a stepping stone. This will help work out if you should push towards the top of your range, or just get into the market.
2. What other goals do you have?
Are you both (if a couple) going to be working steadily for the next 5 years or more, or do you have plans to travel extensively or start a family etc? if so, this may impact how high a price you want to go for with the house.
3. What can you afford?
We need to look at your budget and see if you can afford the potential mortgage, and work out what max loan to target. Your maximum may be less than you can get approved for.
If you have an expectation of a higher income in the near future you may be able to stretch for a little bit, but its best to get advice on this.
When you answer these 3 questions with your adviser you will be get a better indication of your ability to buy and a bit more comfort as you get started than just walking into the bank.
In future articles we will talk about some of the other stuff you can do to get ready. If there is an area of getting a mortgage you want more advice on, get in touch and we can write an article on this.