Finance is a critical part of the home buying process. While much of the loan application process is out of your control, and this is where a good finance broker will help speed things up, there are still some things you can do to make the process easier.
Let’s look at a few things you can do to make things easier for you:
1. Clean up your credit record.
Ensure you clean up any credit problems before you apply for your loan. Check your credit rating and if this report does include any problems, correct or resolve them.
2. Provide all requested information quickly.
If your lender or mortgage broker asks you for further details get it to them as soon as you can, otherwise the loan application process will be held up while they wait for information from you.
3. Keep in contact with your lender or mortgage broker to check on the progress of your loan application.
Contact them regularly to make sure that things are moving smoothly, nothing has been forgotten and there’s nothing further you can do to assist.
4. Don’t buy up big just before applying for your loan.
If you go off and buy a new car or furniture just before you apply for your home loan, this debt is going to show up on your credit record. It’s best to wait for this type of purchase until after you get your loan approved.
11 questions to ask potential lenders:
When doing your research on which type of loan to apply for, or when your Finance Broker or lender recommends a loan, here are a few questions you could ask them;
- What types of loans do you offer and what are the benefits of each of these?
- Do you have fixed rate as well as variable rate loans? What is the cost of switching from one to the other down the track?
- What are your current fixed and variable loan interest rates and what is the comparison rate?
- What other facilities are attached to the loan e.g. credit cards, cheque accounts, etc.
- Are there any loan application or establishment fees?
- Do you require mortgage insurance and if so how much will this cost me?
- Can I repay part of or all of the loan? What is the minimum amount required? Is there a fee?
- Can I make extra repayments i.e. weekly or fortnightly throughout the life of my loan? Is there a fee for this?
- Can I access any extra money I pay into my mortgage? How quickly can I redraw this and is there an associated cost?
- What are your fees for late interest payments?
- How long does it usually take to process a loan application?
This article is an excerpt from the top selling book: The Australian Guide to Buying and Selling Your Home.