Unlock the secrets to a successful home loan application with expert advice from Justin Easthorpe. From assessing affordability to negotiating favourable terms, Easthorpe’s insights empower buyers. Avoid pitfalls with financial discipline and ensure a seamless journey with the help of the free services of a bond originator.
Tips from the pros when it comes to applying for a home loan
Establish Your Financial Boundaries
Banks typically have guidelines to ensure responsible lending. As a general rule, your monthly bond repayment should not exceed 30% of your gross monthly income. Additionally, consider your overall financial situation to ensure you have enough money at the end of the month to comfortably cover all expenses, including your bond repayment.
Start with an Affordability Assessment
Before embarking on your house-hunting journey, it’s crucial to gauge your affordability. Potential homebuyers are able to obtain an affordability indicator from a bond originator. This indicator considers your credit score and existing debt obligations, giving you a realistic view of your financial capacity. One notable aspect is that the services of a bond originator are free for the homebuyer. Bond originators are compensated by the bank, making their expertise and assistance a valuable resource throughout the application process, without any additional cost to you.
The Home Loan Application
Applying through a bond originator allows you to access comparable quotes from various banks, increasing your chances of securing the best offer. It’s advisable not to limit your options to your own bank. Once you’ve found the perfect property and made an offer, the bond originator takes charge. They submit your application to the various banks. Your application is then passed through a meticulous vetting process. The application is scrutinised by credit managers to ensure viability, and, if approved, the bank will issue an ‘Approval in Principle.’
Property Assessment and Final Grant
A crucial step in the purchasing process involves a bank valuer assessing the property. Once satisfied that the purchase price is in line with the real-life value, the bank will issue a final grant. This signifies the bank’s commitment to providing the home loan. The bond originator plays a key role in this phase, receiving final grants from multiple banks and negotiating the best terms and conditions on behalf of the buyer.
Exercise Financial Discipline
While waiting for home loan approval, avoid creating additional debt. It’s essential to maintain financial discipline during this period to avoid any negative impact on your credit profile. It’s also important to maintain financial discipline beyond the home loan approval to ensure that you continue to be able to pay of your debt.
These insights provide a comprehensive guide for potential homebuyers navigating the complex terrain of securing a home loan. By understanding affordability, leveraging the expertise of a bond originator, and maintaining financial discipline, individuals can increase their chances of a successful and stress-free homebuying experience.
