Whilst you may not have a lot of assets or liabilities, it is always good to have a clear list ready for your lender.
An accurate way to work out exactly what your commitments are is to obtain a recent statement for all personal loans, car loans and/or credit cards you may have. The lender will almost always ask for up to date figures and paperwork to support the information you entered in your loan application so it is a good idea to have these documents ready.
It is advisable to not make any major purchases, such as a car, truck, boat or motorcycle that requires you to gain finance (a loan) in the lead-up to applying for a home loan. This will only increase your debt-to-income ratio and that’s something loan assessment officers will look closely at. For the same reason, it is best not to buy furniture or big-ticket items on credit at this time as it also will increase your debt and make it harder for the funder to respond to your home loan application with a positive answer.
Having a lot of debt increases your debt-to-income ratio. This is a key factor that lenders use to determine how much debt you can comfortably manage. Before you apply for a home loan, make sure that your credit card balances are low.
Refrain from using your credit to make purchases if you need to acquire a home loan. If your credit card balances are already high, start paying down the balances and keep them low.
Trusted Mortgage Broker has a great range of tools to help with all those tough decisions that come with finding the right loan. For more information contact us today
Disclaimer: It is designed for publication, to provide you with factual information only, and it is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Ok loans nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 0431579459
Credit Representative Number 534490 is authorised under Australian Credit Licence 384704.
When you’re self-employed you know only too well, your income can vary each month and that makes saving up for a home pretty tough going. If you really want to show potential lenders you’re a good candidate for a home loan, having a history of steady, regular savings is a really great place to start.
Here are six ways you can amp up your ability to put that money aside.
1. Doing well?
Save more When things are going well and you’re earning more money, don’t be tempted to splash out and reward yourself – keep your eye on the bigger, more important goal you care about. Stash a good piece of that extra cash. The real reward is the bigger number in your interest earning savings account.
2. Set yourself a target
Work out where you want to live first, then calculate how much you need to save for a deposit in that area – and don’t forget to add on those extra costs like stamp duty and legal fees. Remember that, depending on the product you‘re applying for, different lenders may charge different fees. It’s technically possible to get a loan with a five per cent deposit, but hitting the 20 percent target will help you avoid extra fees.
3. Watch your progress
It’s not just kids that respond to visual reminders – we all do. Make a colourful wall chart of your savings target, so it is always front of mind and you can see it grow when you add each new amount to the top.
4. Be smart with taxes
If you’re self-employed, there are tax deductions for business related expenses that can really add up to help you save. These might include things like home office expenses. To get good information about what you can claim, check out the ATO website or have a chat with a qualified tax professional or an accountant who can help.
5. Always put a little something away
A little goes a long way. When your income is different each month it can be tempting to only put money aside when you get large payments in. Everyone’s situation is unique but if you save a bit of what you earn every time you get paid, you’re always working towards your own home target and you’re getting there one step at a time, every time.
6. Protect your income
If you can’t work because of injury or illness, income protection insurance can help cover for lost income so you don’t use your deposit savings to live on. ASIC’s Money Smart website offers some good tips and information about income protection insurance that’s worth checking out. If you’d like more information talk to us today about how we may be able to put you in touch with a lender that can help if the major banks say ‘no’ to your loan application 0431579459.
Disclaimer: It is designed for publication through Accredited Brokers, to provide you with factual information only, and it is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Ok loans nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 0431579459
If you are thinking about investing in real estate for the first time, it’s natural to feel a little bit daunted.
Not only are property investment loans different from normal home loans, but you face the pressure of ensuring that your investment is a successful one.
What’s important is to realise that no one starts out an expert and that with a bit of homework and by speaking to the right people, you can successfully manage the transition to being a property investor.
Learn about the market
No matter where you plan on buying property, you’ll need to learn a bit about the local property scene. Just like any other kind of investment, a little bit of context can go a long way to making you confident about your purchase decision.
For instance, if you are considering a move for residential rental property, recent trends in vacancy rates can be a helpful indicator of tenant demand.
Similarly, keeping an eye on new dwelling construction can provide a perspective on the housing supply situation in the area you are considering.
Understand the expenses
It is crucial to understand the expenses involved in investing in property. These need to be factored in to your calculations.
Things like strata levies, stamp duty fees and council rates may vary depending upon where you choose to buy, so make sure that you are clear on these before going through with your decision.
For rental investment, it is also a good idea to investigate the cost of landlord insurance. This can provide you with financial protection in case of theft, property damage or prolonged vacancy.
Get trusted advice
For help navigating the sometimes complex waterways of property investment finance, seek expert property investment loans advice.
Here at Ok loans we can help you to find the right investment loan package for your property objectives.
We can give you excellent guidance through your repayment options and how you can best manage tax and gearing.
Ok loans has a wide range of top mortgage lenders and supporting advanced software to help with all those tough decisions that come with finding the right loan. We assure you to find a right loan and simplest process in achieving your financial goals.
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We are here to help you.
To find out more how investment could work for you? Register for e-books
It’s handy to know that each time you submit a home loan application, the lender runs a credit check immediately – regardless of whether or not you’re applying with the same lender or another bank or financial institution.
So, with every application for credit being recorded on your credit file, numerous inquiries over the past six to 12 months can be detrimental to your chances of getting a loan. This is because when you do finally make a genuine application, lenders view excessive applications for credit as ‘shopping’ for credit, which can be regarded by the lender as ‘risky behaviour’.
If you’re just curious about the potential savings or benefits of switching from one lender to another, you can easily make those inquiries with your Ok loans expert – and this is not recorded on your credit file.
Also, if you’re interested to learn more about what’s on your credit file and what this means to you when you do submit a loan application, your Trusted Mortgage Broker will guide you where to go to obtain your credit history.
Ok loans has a great range of mortgage calculators to help with all those tough decisions that come with finding the right loan. Have a look at our calculators on our website to help you further.
To buy a house you first need to save for a deposit, but there is more to this to consider!
The first step towards home ownership involves a lot of planning. From saving to researching, this 7-step guide is designed to take you through the steps to reaching one of life’s big moments.
1. Work out your deposit target
The first step towards getting your own home is saving for the deposit. Having a good habit of saving and budgeting is the best way to get going. But it can be hard knowing exactly how big your deposit should be. Take a look at the area you hope to buy in, recent sales prices and the average percentage price increase year on year. That will give you a good idea of what you need to aim for. The minimum deposit to take out a Pepper Money home loan is 5 per cent of the total purchase price of the
property. This amount will vary depending on how much you’re borrowing and the type of loan you are applying for.
Have a look at this online saving calculator from MoneySmart to see what you need to save each month over different timeframes to work out how long it will take you to reach your goal.
Tip: It is always a good idea to set aside a 20 per cent deposit not only to ensure that you have enough money to cover the additional fees and charges associated with your loan, but also to avoid paying a risk fee.
2. Start your budget
If you don’t have a monthly budget already then now’s the time to work out exactly where your money’s been going – and where you want it to go. Sounds simple but it is the heavy lifter when it comes to saving up for deposits. It’s only when we see how much gets spent on coffees, drinks or takeaways, that many of us realise we can start to keep some money back each month.
For more handy resources, check out budget planner from MoneySmart. What do you think you can save on each week?
3. Think about ways to earn more money for a while
You are never too old to babysit or take on an extra job doing something like house cleaning or gardening once a week. Or you can sign up for being available to do household work on Air tasker. It will keep you busy when you might otherwise be spending money and it’ll really help that deposit grow faster. If there are two of you saving – like maybe a friend saving for something they want – work out what you can do as a team. It’ll be more fun and you can help motivate each other.
4. Get credit ready for the lenders
When looking to buy a home, it’s really important that your credit history is in as good a shape as possible. First, pay off any outstanding debts if you can. Clearing your debts plus a history of regular savings in your bank account, combined with a good record of employment, will really help you secure a home loan in the future. It’ll also stop you paying over big sums in interest; credit card debt eats up money, so clear it.
Second, check your credit rating. What is a credit rating? Companies that give credit (like banks, insurance companies and power companies) want to know if you have a good financial track record. Credit agencies collect that information to help those companies make decisions about lending to people. They gather information about your credit history and, on the basis of what they find, they give you a credit score – a number between 0 and 1,000. Most credit scores are between 300 and 850. The higher the score, the better your credit rating is. You can find your score for free online.
Have a look at the report and make sure everything is accurate. If you see any mistakes, now is the time to correct them. If you’ve never applied for credit, you probably won’t have a credit score, but most people have a credit history of some sort.
If your credit history looks good by the time it comes to apply for your home loan, you’ll have a better chance of securing it. So in the time between now and when you apply, don’t fall behind on bill payments or add any new debt.
5. Understand the costs involved in buying a home
There are lots of small extra expenses and fees that are part and parcel of applying for a home loan. These have the potential to add up, so it’s super important to do your research into the details of any offer you look at.
Some of the hidden costs could include establishment fee, legal fee, monthly administration fee, risk fee and more.
6. Get a feel for the market
Other important things to think about are the average price for where you want to live and home loan interest rates – both of which can change in a year. You could also think about going to some property auctions, without bidding of course, so you can get a feel for how the market is going.
7. Decide if you need expert advice
Expert advice is another potential cost, but there are benefits in getting help. Whether it’s a buyer’s agent, accountant or real estate broker, their knowledge and specialisation could save you money in other areas – not to mention guiding you through some of the more technical aspects of buying a home.
Ready to take the next step? Try our borrowing power calculator to find out how much you could borrow with Pepper Money. Alternatively, talk to one of our Pepper Money Lending Specialists on 0431579459. We have the widest range of loan options in the market – from regular loans [called Prime loans] through to specialist loans for people who might have credit history issues or who doesn’t have the usual earnings history.
Disclaimer: Original content source: pepper money It is designed for publication through Accredited Brokers, to provide you with factual information only, and it is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Pepper nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 0431579459.
Buying your first home? Here are 7 things you need to know.
Bigger deposit, better position
While some lenders can offer low-deposit loans for less than 5 percent of the purchase price, saving around 20 percent can offer you big benefits:
• Access to a wider pool of lenders and products
• You need to borrow less money overall
• It’s a clear sign to potential lenders that you’re good at managing money.
If you’ve saved less than 20 per cent there are lenders who can help, but deposits of that size may require Lenders Mortgage Insurance (LMI). This adds more fees and another layer of assessment of your suitability because LMI providers are separate businesses and often have quite strict rules.
Know your credit rating
Lenders use your credit rating to judge whether your circumstances are suitable for a loan. Some non-bank lenders will review your financial situation as a whole, so your credit rating’s not always the defining factor when you apply for a loan. But it does matter. Credit scores are closely linked to the success of home loan applications, so understanding what makes up and affects your credit rating is important for any homebuyer. Get hold of a copy of your personal credit file and review your own credit rating – including any defaults listed against your name. There can be mistakes on your report – if you pick up on them you can request they get altered.
You probably know where you want to buy and how much you want to pay; now it’s time to work out how much you can reasonably borrow. You’ll need to take the various home loan fees into account, like stamp duty, legal fees or Lender Protection Fees (LPF). You should also think about your current situation, your income and expenses, any dependents (kids or parents), and any lifestyle changes you can see coming up – like a job change or starting a family. Think about what’s likely to happen in the near future – as well as how it is right now.
If the home loan doesn’t fit, don’t sign up for it
There are more things to consider with a home loan than just the interest rate. There are redraw and offset facilities, refinance costs, repayment flexibility, fixed or variable interest rates, loan terms and fees to consider. Make sure you research the loan options available and examine them all.
Research, research, research
Did we mention research? Often the difference between a diamond in the rough and a dodgy deal is simply the buyer’s level of market knowledge. The more you know about the property market and where you want to buy, the better. Look at average prices over the last decade, whether it’s near to shops, schools and transport, potential rental returns, etc. You want to be sure the area has what you need in terms of both lifestyle now and future growth opportunity.
Speaking of growth opportunity, remember that sometimes the best locations for property growth are not the ‘hot’ suburbs but the suburbs next door. These often provide a cheaper entry point and greater potential for development.
Likewise, a brand new or newly renovated property will generally charge a premium for the look. An existing, lived-in home may not look as pretty, but it can be much better value and let’s you add your own personality to it.
If you don’t have the finance, don’t make a bid
There’s no cooling-off period at auctions, once you’ve made an accepted bid that’s it. Buyers without finance approval can find themselves in serious strife if they sign a sale contract.
Stay on the safe side, make sure you hold a letter of finance approval from your lender. That way you can negotiate your purchase price without worry.
If you’re a first home buyer ready to enter the market, keep these hot tips in mind. They can help you be a savvy home buyer. If you’d like more information visit www.okloans.com.au
Disclaimer: Original content source: It is designed for publication through Accredited Brokers, to provide you with factual information only, and it is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Pepper nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 0431579459.