Interest rates remain near historic lows, but that may start to change before long. Meanwhile, as the cost of rental homes pushes into the stratosphere, it’s worth considering whether it’s time to get into home ownership instead of renting.

If you’re thinking of buying a house or refinancing your existing mortgage, these golden rules can save you thousands of dollars as well as heartache

1. Check Your Credit Reports Early

Your first move — long before you start home shopping — is to find out where you stand with mortgage lenders and how to improve your position.

One of the key things that lenders look at is your credit report. It can cause great heartache is an unknown issue on your credit report causes a decline. It is free to request a copy of your own report. Defaults can be lodged against your name in error. You have a chance to tidy these issues up before applying for a loan. It takes time to fix any errors, so get going as soon as possible before applying for a mortgage.  You can access your credit file for free using this link My Credit File, the free version takes up to 20 working days.

2. Meet With a Mortgage Broker.

A good Mortgage Broker will coach you through the whole process not just get you a finance offer. Mortgage Brokers are on top of what the current lending policy is for the main banks and has access to other lenders if you do not meet the main banks policies.

It is good to know in advance what the lenders will be looking for in your information so if there is anything you can do to better your position before applying for a loan your mortgage broker will advise you.

Most Mortgage Brokers should be able to give you a level of education and understanding which you wouldn’t get through a bank. They are able to assist you through the whole process including liaising with the rest of your team (Solicitors, Accountants, worried parents etc). They know the right questions to be asking at each stage and should make the whole process less stressful which is especially important for first home buyers.

3. First The Mortgage, Then The House

You’re probably itching to start shopping for a home. That’s fun, but keep your head on straight. Get pre approved first. Looking for a home often gets emotions and fantasies all fired up, tempting shoppers to spend more than they can afford.

Don’t let emotions hijack your home purchase, causing you to overpay or stretch beyond your means. Remember in looking at you total affordability you will need to allow for expenses that you are currently not paying. Such as Council rates, house insurance, house maintenance, personal insurance

Getting pre-approved means that the lender as qualified you for a loan up to a set amount of lending. They will still need to approve the property that you are looking to buy. But by completing this step it means  you are much closer to putting in a clean offer at time of negotiating a sales and purchase agreement

By pre-approving your loan, the bank provides a conditional commitment to lend you up to a specified amount.

Be careful though as once pre-approved the banks will expect your financial situation to remain the same or improved. So avoid getting any short term debt as this will chance your credit score as well as change your statement of position. If you say bought a $20,000 car with finance after you were pre-approved the bank would re run your credit prior to and unconditional offer and they could withdraw their acceptance.

4. Begin The Hunt For a House

Now that you know what you can afford to pay for a home, you can finally start shopping.   If this is a first home keep in mind it is not your dream home. Be realistic with your price range so you do not over extend your self in your first home

It’s a really good to have a clear idea on what you are looking for in a house and prioritise the importance they have to you.

For example is 3 bedrooms a must? Do you need to have a Garage or space to build a garage? Does it have to be in a certain zone to get your children (future or existing) into the school you want?

This will help you narrow down the properties in your search as the amount of open homes and listing can be overwhelming.

Make sure you are also keeping an eye on what the houses are selling for rather than just what they are listed for. If you make an offer and miss out make sure you esquire as to how much the house sold for, all these bits of information will help you in your journey to home ownership.

5. Involve a Solicitor From The Outset 

Before you make an offer on a property always make sure your solicitor has looked over the sales and purchase agreement and included and clauses in there that you may need.

If you don’t have the right clauses or none at all you may end up having to settle on a property you aren’t happy with and pay more than its actually worth.

Real Estate Agents can often try and make you sign the sales and purchase agreement then and there, remember the are working for the seller.

6. Loan Structure 

Once you are unconditional on a property its really important to ensure you structure your loan correctly. This could save you thousands in interest costs if done correctly.

This is again where your Mortgage Brokers expertise comes in, if you are buying in a company or trust for whatever reason it would be advised to also consult your Accountant.

At Bricks & Mortgages we want to help you pay back your mortgage faster and more effectively! We want to help make a profound positive difference to your financial well being.

This is why we help you with loan structure and re-fix reviews over the life of your loan, not just when you buy.

To start the process, please schedule a quick Strategy Session with us today!