Buying a new home is thrilling and exciting, especially for first-time buyers. Fortunately, they feel more excited when they find the house of their dreams, where they plan to create the best memories. They are agitated when their home loan application is disapproved or is approved for an insufficient amount. They feel heartbroken as the property is not within their reach.
It is sensible to understand what not to do and how to properly prepare the loan application that enhances the chances of approval. Sydney Brokers save you hours of looking for competitive lenders suitable for your specific needs. They are the best finance broker Sydney that can help in attaining a home loan for buying, renovating, and more.
What mistakes to avoid before submitting a loan application?
Never go house hunting before determining a budget
Fantasizing and spending resources in property hunting you will never afford is not a good idea. You can end up heartbroken. Prevent this with a pre-approved loan. Planning your finance before you go house hunting offers an idea of how much you can afford to purchase and stay within budget.
Never assume you will qualify for First Homeowner Grant
There is a First Home Owners Grant made available but the criteria for eligibility are strict, so never assume that you will qualify as you are buying your first home.
Never submit a loan application before correcting your credit scores
Your credit report is in the public domain, so every lender can gain access to it. It is a major factor and can even be a key stumbling block if it is not good. Therefore before loan application submission, check your credit score. Rectify the errors and take steps to improve them if necessary. Now, you are aware of what the lenders will see in your credit file.
Never apply to multiple financial institutions
Lenders even check if you have applied to some other financial institutions or not. It is recorded in the credit file. Unfortunately, it does not reveal whether your application was declined or approved, so the lenders automatically assume that your loan application was declined. It makes them feel nervous and leads them to reject your loan approval.
Ignoring to shop for better deals
Never settle on the first mortgage deal because there are chances you can find a better one. It may feel like the best deal because of low-interest rates but there are many other features just as important. There are different loan types like fixed, split, and variable offering lots of extra features. Understand all of these and choose the one that fills your needs despite a little increase in interest rate.
Never give dishonest information
For example, while sharing your information about income and expenses ensure it is correct. Lenders use these to determine your capability to cover mortgage repayments. In case the numbers don’t add up they become suspicious and reject your application without any hesitation. The lenders can even file a fraud case and you can end in jail or get significantly penalized.
Besides, the mistakes mentioned above there are several other things to consider like understanding additional purchase costs and avoiding taking more than your budget. Follow the above tips to increase your chances of home loan application approval and achieve a dream house!