- Check your credit history: This matters because if you have good credit you may get a cheaper rate (2-3%) whereas with bad credit you may be looking at (4-6%). Mortgages last for over 10+ years and a small difference in rates add up over long term costing your more. Check your credit history first good credit means good rates savings you heaps over the long term.
- Affordability: Check how much you can afford (not borrow) most people make this mistake of buying the biggest possible house based on their maximum borrowing capacity. Stick with what you need and afford instead of making an impulse decision of buying the biggest house possible.
- Deposit: 20% is ideal or 5% for the first home buyer under FHLDS (first home loan deposit scheme). If you have less than 20% or not applying under FHLDS watch out you will pay additional costs like LMI.
- Steady Job: if you don’t have a stable income don’t buy a house as average mortgage stays around 15-30 years, that’s a long time. Think about how many jobs have you had over the last 2-3 years. This will be an important question as you don’t want to commit to something that you may have to do a fire sale on shortly after buying.
Pardeep (Paddy) Boyal is managing director of South East Wealth practising mortgage broker & was a licensed financial adviser. E: firstname.lastname@example.org or visit www.southeastwealth.com.au M: 0420 589 194