It is a pleasure to be asked by the team at One Agency Country to Coast to be a guest blogger.
I have worked in finance for over 30 years, so of course I think about home loans all the time – but lately I have been really deep in thought about the process of buying a home and the path to a successful finance approval. The reason for this deep thought of late – is because in the next few weeks my daughter will settle on her first home purchase, and I have been coaching her and her partner along over the last 18 months, from first deciding they want to buy a home of their own to actually being able to achieve that goal.
The above picture is the day I received the keys to my first home in October 1990. There is a lot of brown going on here – my little brown car, my house with lots of mission brown paint and a pretty browned off expression on my face, because I had just signed up for a mortgage with the eye watering rate of 17.5%. It was a tough path to obtain finance back then, rising interest rates, high unemployment and a major financial institution had just collapsed in Victoria. I was terrified about making the mortgage payments, but my Mum was so proud of me and I always did make those mortgage payments and buying this house set me on a great path for the future. When my daughter gets the keys to her house – we are going to recreate this picture – with the family cat included – and I will be the proud Mum standing by her daughter on day one of her home ownership journey.
Is it harder to get finance now than back in 1990? Yes and no? There are more lenders in the market than ever before and the lenders want to lend, and interest rates are at the lowest we have ever seen – but there are a lot more hoops to jump through, and it is the organized and well planned application that will be approved and set you on the path to home ownership.
The key to hearing those magic words, “You have a full and unconditional approval”, is not getting overwhelmed with the road ahead, and instead breaking down your home loan finance application into small easy tasks. Just as I have coached my daughter along, over the next few blogs I will share hints and tips to make the finance approval path much easier. Please feel free to ask questions – first home buyer, second home buyer, investment property buyer, interested Mum or Dad – the only silly question is the one that you don’t ask!
Step One – Check your credit report - this is FREE and easy to do. There are many services that offer you a free credit score check, but be careful who you give your data to. I recommend using the service at Equifax https://www.equifax.com.au/personal/ and selecting the free option. You are entitled to a free copy of your credit report every 3 months.
Once you have your credit report, you can start to see the information that a lender will learn about you. The report will detail information about you such as your name, date of birth, address history, employment history, current credit products you have – including credit card limits and buy now pay later credit enquiries, past applications for credit, repayment history and overdue debts.
If there is any information on your credit report that is wrong – it is really important to get this corrected, and getting this corrected at the start of your finance quest is super important. We can point you in the right direction if you need assistance with understanding your credit report, or getting corrections made.
Stay tuned over the coming blogs for hints and tips on the information a lender will ask for, the importance of budgeting, explaining terms that you will come across, why you might need to break up with your credit card, first home buyer assistance schemes, and even the odd gardening tip. (When I am not working at my desk – I can be found working in my garden J)
Hit me up with your property finance questions – and happy house hunting to all.
KB
Allbiz Finance Brokers Pty Ltd ACR 478898 is an authorised credit representative of Australian Credit Licence no 477554, and that all information provided is general in nature and should not be construed as personal financial advice.