Navigating the home loan process doesn’t need to be complicated and daunting. Although it is a challenging task, first-time home buyers can maneuver their way to get started with their path to homeownership. In my 10 years of experience as a mortgage broker in Australia, I’ve seen a fair share of successful home loan journeys. And here are a few of the key tips I curated over the years that helped my clients in making informed decisions that fit their financial needs and lifestyle.
Do your research
You don’t have to learn the intricacies of the housing market, but it would be ideal to get some research done before applying for a home loan.
For one, googling the interest rates of different lenders will give you a realistic idea of your prospects. You may also find it helpful to read news articles: current events, particularly in the financial and political spaces, may affect the loans offered by lenders. Lastly, speaking to a bank or Pag-IBIG representative and asking them questions may give you a clearer understanding of the home loan application and approval process.
Compare several options
When you do your research, you may find that you have more than one option. By lining up your prospects and comparing their pros and cons, you can avoid the possibility of accepting the first offer you get and then feeling like you made the wrong choice when you encounter a better deal later on.
Filing several applications may work for you, too, if you would like to have a fallback in case your first choice does not pan out.
Evaluate your finances
An honest assessment of your income, debt, and expenses will help you determine whether or not you can afford to get a home loan. In general, no more than 30% of your income should go to mortgage payments, so that you can still comfortably make ends meet while repaying your loan.
Ensuring early on that you’re not biting off more than you can chew will save you a lot of stress down the line.
Work with someone who will act in your best interest
There’s nothing wrong with DYI-ing your home loan research and application process, and that’s perfectly doable given the wealth of information that’s available online these days. However, you might also find value in professional advice – a mortgage broker, for example, can help you find a loan that suits your needs and financial ability. A broker can also take away some of the stress of applying by coordinating with lenders on your behalf.
Sales agents can also do these tasks, but if they’re employed by property developers, it’s likely that their priority is making a sale rather than finding you the most optimal deal possible. Independent mortgage brokers may be in a better position to act in your best interest.
Maria Papa is a senior property and finance expert specialising in home loans, investment loans, and self-employed loans. If you have questions, you can email Maria at mpapa@maverickfinance.com.au.
Disclaimer: Your full financial situation will need to be reviewed prior to acceptance of any offer or product.
