Getting your finance pre-approved prior to any house hunt will help you when you find your dream home. Use these handy tips on your quest for property gold!
Learn the 3 C's to getting pre-approved
- Capacity - the banks want to know you have a strong solid income. They also want to know you're not spending too much of your income on loan repayments.
- Collateral - this is your deposit or equity. The banks to lend around 80% the value of a property so you need to be able to provide the rest.
- Character - are you a credit risk? The banks want to know that you're a good character. Make sure you have no big black marks on your file
- Check bank restrictions for borrowing money. Some banks get nervous about lending money for certain properties so check that the home you want is on their list
- Lenders Mortgage Insurance - depending on your lender’s requirements, Lenders Mortgage Insurance (LMI) allows you to borrow up to 95% of the purchase price of your home, with a lower deposit than is usually required. With Lenders Mortgage Insurance, lenders may allow you to borrow a higher portion of the purchase price, allowing you to purchase a property sooner and with a smaller deposit than would otherwise be required.