Looking for how to apply for a home loan in Australia? You have come to the right place as we have gathered a few tips that will help you get started.
Very much like all other countries, apply for a home loan in Australia, you need to have a range of proofs of your current financial situation and of course, ability to repay that loan in the future. No matter if you are applying for the first or twenty-first time, or whether you apply directly or through a mortgage broker, go through some of the main tips that will help you How to Apply for Home Loan in Australia.
Research Thoroughly and Compare Options
First and foremost, you should do a little bit research on what home loan would suit your buying home situation. It’s perfect to take into account factors i.e. features and fees that apply to a loan. The details about home loan companies are sorted by a current advertised interest rate. So, before committing to a particular home loan product, don’t forget to check upfront with your lender and read PDS to make sure the terms of a loan meet your needs or not.
- Star Rating: 5
- Current Rate: 3.58%
- Comparison Rate: 3.59%
- Monthly Repayment: $2721.14
- Star Rating: 5
- Current Rate: 3.59%
- Comparison Rate: 3.61%
- Monthly Payment: $2724.51
- Star Rating: 5
- Current Rate: 3.64%
- Comparison Rate: 3.67%
- Monthly Payment: $2741.38
Based on residential first home buyers’ variable rate home loans available for an amount of $600,000 at 80% VLR. It’s available alongside a principal and interest repayments.
Can You Repay a Loan with Ease?
You would be needed to show up your proof of income to the lending institutions. If you are employed, it’ll include your pay-slips (normally 6 months’ worth of pay-slips and more in some cases), and if you are doing your own business, it’ll include your tax return.
When it comes to repaying the loan, if you are relying on any other income sources, you will be needed to submit evidence of that as well. For example, lease information, Centrelink statements confirming any Government benefits and shareholding statements, etc.
What are Your Living Expenses?
It’s a bold move to write a budget as it’ll help you track all of your cash flow and plan your daily savings and expenses. If you have decided to write yourself one, you should make sure it’s realistic. And if it’s not yet done by yourself, you can try a Budget Planner Calculator.
Do You Have Savings History?
Be noted that specifically if you are going to apply for a big loan first time, you will be needed to show that you don’t spend all the things you earn. If you are looking how to save, the Internet is here to help you guide how to save money with ease.
What is Your Credit Score or Rating?
Obviously, your credit score needs to be strong as it may influence how much credit a home loan lender is willing to give you. Those who have a lower credit rating or score, it may be viewed by a lender as being the biggest risk as it could show an inability to meet repayments.
Didn’t you apply for any loan so far? And don’t you know how to check your credit rating or score? There are so many private credit agencies that can help you check your credit score or rating such as Dun & Bradstreet and Veda.
Are You a Stable Employee?
Don’t worry about recently made several changes of jobs wouldn’t disqualify you from a loan. However, it can make it more challenging. Loan companies are normally more comfortable lending to someone who has a steady employment history instead of giving to those who had frequent job changes or long gaps in employment.
Did you Consider Your Net Worth?
Again, your estimate should be realistic. Do consider your net worth as it’s essentially a grand total of all your property/assets minus your liabilities. You can use Moneysmart Net Worth calculator in order to examine the strength of your current financial situation.
Do You Have a Deposit?
You are required to put down a deposit and pay any taxes, fees and other buying costs (miscellaneous expenses) that may be linked with your loan. Some of the lenders need a 20% deposit whereas others will be willing to accept minimums of 5%. But getting approval for a home loan is getting harder as backs all over Australia have tightened their loan criteria amid growing regulatory concerns around household debt.
Are you willing to put 20% deposit down, interestingly, you would end up paying significantly less interest and you will be able to avoid paying “Lender’s Mortgage Insurance”.
Other Important Tips for Home Loan in Australia
Can Foreigners Apply for Home Loan in Australia?
A home loan for foreigners can be named as Non Resident Home loan in Australia. No matter if you are a citizen of New Zealand or any nearest region, you can apply for a home loan if you are currently working in Australia. It’s most likely that you’ll get up to an 80-95% of your property value. It depends on where you live.
It’s better to speak to the Australian Expert Home Loans on 1300 889 743 and +61 2 9194 1700 from outside Australia.
Can I Get a Mortgage in Australia?
Australia is equipped with quite a few lenders with specific new immigrant mortgage products – named as non-residents loans”. It allows you to borrow up to 80% of your property value and in some cases even up to 95%. Call on 1300 889 743 to mortgage brokers specialists to know about how to apply for a home loan to buy a home in Australia.
How Do I Know If I Can Qualify for a Loan?
If you have a credit score of at least 580, front-end Debt-to-income ratio 31% and back-end is 43% and can easily pay 3.5% down payment, you can apply for a loan. Be noted that alongside these cores or percentages, you must have a steady income and proof of employment for the last two years.
How Can I Get a Loan in Australia? Make sure you are above 18, hold Australian or New Zealand citizenship, or Australian permanent residency or eligible for Visa. Not only this, you have a good credit history, meet the minimum income requirements, be employed or receive regular income and not be going through a process of bankruptcy.