Buying a home can be an exciting and a fun experience. But finding the right one can be quite a daunting task. Choosing the right home loan can be just as important a task. There are various things to consider, in order to find the best home loan for you, as per your preference and comfort.
Here are some tips to find the right home loan:
- First start saving for the down payment
Depending on the type of loan you choose and your lender, your required down payment might range from 2.25% to 20% of the buying price of the home. If you establish a monthly budget, it will help you to put away enough money for paying your down payment. If you are not able to manage a large down payment, then you can even consider FHA loan. This kind of loan helps home buyers, to make a small down payment.
- Get all your financial documents in order
When you apply for a mortgage, you have to provide your lender with several financial documents. If you have already assembled and sorted all your financial documents well, it will help a fast acceleration process of your loan application. Minimally, you should be prepared to provide your last 2 pay stubs, your previous last 2 years of tax returns, your most recent W-2, and brokerage and current bank statements.
- Check your credit score
Having a great credit score, will put you in a position to attract the perfect deal on your home loan. Therefore, it is a good idea to get a copy of your credit report, beforehand to initiate the home purchasing process. In this way, you will be able to see your credit profile before a potential lender looks at it, and if necessary, then take steps to improve your credit score.
- Make use of mortgage calculator
Mortgage calculators are best tools for helping you properly understand how much home loan you can actually afford. They are simple to use and can show you how much your monthly mortgage payment will be, interest rate scenarios as well as down payment.
- Begin tracking rate of interest
The rate of interest will be one of the biggest points in determining the price of your mortgage. The rate of interest for mortgage keep changing almost every day and you should know where they are heading.
- Get pre-qualified
Most of the real estate agents want you to be pre-qualified for a home loan before they will begin to work with you, in order to find the best home loan for you. The mortgage pre-qualification process is quite simple, mostly just requiring some financial information like – your amount of savings and your income, along with the investments you have done. Once you are well pre-qualified, you would be having a better sense of what amount of money you can borrow and the range of price of the homes you can actually afford.
To find the best home loan in Australia, you should choose iSelect, who are powered by AFG brokers, as they compare 25+ lenders, offering a wide range of product variations.