Important Things To Know Before You Get A Loan
Recently I had a new website reach out to me to ask me some questions about speaking with a mortgage broker. I thought that you guys would benefit from this information as well. Thanks Simon and the team at Loanfy
and here it is…
Are you gearing up to hit up auctions and private listings around Melbourne or wider Victoria?
Before you do we’ve asked one of our accredited mortgage experts Tony Walsh some questions and as always has given some super informative answers.
What should people do before speaking to a mortgage expert or bank?
Nothing, they should actually speak with a mortgage broker first to put them on the right path. A good mortgage broker would be happy to speak with you and put you on the right path. Every single client is different and will have individual needs and requirements. Thus, it’s very hard to advise what would need to be done until we hear what you need and how we can help out you on the right path.
How do you calculate borrowing power?
Borrowing power is based on money in vs money out. How much you earn vs how much you spend on living expenses and then other debt that you have to pay. If you have zero debt, then this makes it easier. If you have lots of credit card debt and personal loan (unsecured) debt then this can make things harder.
Do you have any tips that could improve powering power?
Most banks will want to look over the last 3-6 months of bank statements. Just make sure that you keep these clean when you are preparing for an application.
Should people borrow the most possible or should the loan amount be based on income?
Serviceability is the only thing that makes us know what you can afford. In saying that based on serviceability in a couple you could loan up to 1 mil. You should only really take a loan out for what you are comfortable in doing so. As rates fluctuate, the repayment may increase in the future and cause mortgage stress.
Is there a formula that people can work off?
No not really however there are basic calculators that you can use online to get a basic idea however, a 5-10 minute conversation with me and my team would allow us to give you a rough idea.
How long pre-approval last for?
All pre-approval lasts for 3 months or 90 days – you can actually get them extended for a further 3 months giving you 6 months to buy.
Should you get a pre-approval?
100% you should! It’s amazing that some people can go to an auction and buy without approval – I have seen many people crash and burn and lose the 10% deposit that they have placed on the day of winning an auction. They didn’t speak to anyone or be granted pre-approval first.
What is credit score?
Also known in Australia as a credit rating. A credit score is a number used to represent your reputation as a borrower. If you choose to find out your credit score, you’ll be given a number that sits somewhere between 0 and 1,000 or 0 and 1,200, depending on the credit bureau used. An average score these days is 700+
Does credit score matter? Why?
Yes 100% it matters. If you consistently look for credit cards or personal loans your score decreases and if you don’t then it increases.
When someone is ready to buy a home, what advice could you give when entering an auction or negotiating a private sale?
Always speak to your mortgage broker first. A good one will negotiate for you, always make sure that you understand your numbers and limits before speaking to the real estate agent. Remember, it’s a game and they play it well. It’s in their best interest to make you pay more for a property as this makes them more money in commission.
It was so good to speak to Simon and his team and thought that I share this on my website too. If you would like to chat about anything above or if you want a free Credit Report then use then contact us now