We think purchasing and lending got way too complicated somewhere along the way. We are here to help make the lending process better by providing you with REAL solutions. We say it how is, in your terms and on your terms.
If you are ready to buy your first home, Connected Loans can help. Not only can we provide you with access to an extensive range of home loans available to homebuyers, but we can cut through the mortgage jargon and simplify the process.
Purchasing a home for the first time, or deciding to buy an investment property is a big decision, especially with climbing house prices in Australia’s capital cities. Property is likely to be one of the biggest expenses that you undertake in your lifetime, whether on your own or with your family in tow. Therefore, it’s vital that you understand each step of the financial and legal process including picking a lender to signing your contract.
Connected Loans is here to assist you in providing a large range of lenders to choose from across the major banks and other financial lenders. We can step you through the process by utilising our expertise in the industry along with the capability of accessing over 25 lender loan offers Australia-wide.
Knowing your borrowing potential for a home loan will depend on the following:
A loan repayment calculator is a great tool to help you visualise how the repayments will look. It gives you an overview of your financial situation based on your requested loan, including the amount you have saved as a deposit for the purchase of the property. It will tell you how much you need to pay back to the lender for the loan amount that you want to borrow, usually calculated on a monthly basis. The calculator will also inform you how much of your monthly payment will go to the interest and principal amount of the loan. All helping you make smart decisions about the home loan that you select.
Applying for a home loan will depend on the actual lender. It can be a long and complex process depending on your credit and financial situation.
The following steps outline the usual process:
If things go well, the mortgage loan application process usually takes 4 to 8 weeks to complete. It will take longer if your documents are incomplete.
Ideally, you should be able to give a 5-10% deposit on the purchase price of the house. If you intend on buying a house that costs $500,000, you should save at least $25,000 for the deposit and then another 5% to allow for costs. The bigger the deposit, the less you have to borrow on the mortgage.
If you cannot provide a deposit of 20% of the home’s value, you will most likely need to pay for lender’s mortgage insurance. There are however some strategies available where you can use a guarantee from your family to assist with the purchase.
Lenders Mortgage Insurance is a type of insurance that lenders take to protect them from losses in the event that you default on your loan. Lenders will arrange the LMI on your behalf but you will need to pay premium at settlement. The premium is paid once per loan.
Before you start your search, it is good idea to secure a pre-approval for a home loan. That way, the process of obtaining the loan will be faster after you find the right property to buy.
A pre-approval is a great way to determine the amount you can be approved for. It is usually valid for three (3) months – which is enough time for you to find a property to buy. Once you have found a property, you can go back to the same lender to process the actual home loan based on your pre-approval.
Getting a pre-approval is also proof to the seller that you are serious about buying the property. Sometimes, this can work in your favour when there are other buyers interested in purchasing the same property.
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