Every month, people who rent properties are always writing cheques for something that they will never own. In a lot of cases the total amount of the rent is more than it would cost to buy a house themselves and pay each month on it. Basically, if they would just try to get a mortgage, they would no longer have to pay rent and would be buying a house each time they paid off their monthly mortgage payments. If you are able to come up with at least five percent of the total purchase price, then a lot of lending institutions would be happy to talk with you.
Mutual Service can offer you great mortgage advice and guide you through the maze that is getting a mortgage. Getting a low deposit loan in Australia of five per cent is a little difficult, but if you meet certain criteria, then it may be achievable. Let’s look at some of those criteria now.
- Prove That You Have a Strong Income – Lending institutions want to be sure that you can pay for your mortgage when they give it to you. They need to protect their investment in you and one of the best ways to do that is to insure that you take home a very respectable wage. If you are in the job a number of years with a reputable company, then this will always help. Your ability to meet your mortgage payments every month is their concern and they need to take steps to make sure that you can make the payments and make them regularly and on time.
- You Need to Show Real Savings – This may seem obvious, but the lending institution wants to see the whole five per cent in savings and they want to have seen you to have built it up over time. If you are applying for a ninety-five per cent mortgage, it’s best to have the total amount of the deposit already in your account to show them that you are serious about the mortgage and that you are able to save.
- A Clear Credit History – They always want to see a very clear credit history where you have taken out loans for various things but you have paid the money back and you have paid it back on time. They will check for any missed payments and ask for explanations. Not having a credit history will actually go against you. If you haven’t borrowed money but paid for everything as you bought it, this is actually a negative thing as they have no history of whether or not you are a good payer or not.
- Good Asset Position – If you own anything like a car or land, then this will help as they try to establish if you have any assets in the event that they have to call in the loan. It is always good to have collateral behind you as this proves that if you get into financial difficulties then the lending institution has the means to claw back their money
Taking the first steps towards getting your first home by taking out a mortgage is a step that you won’t regret taking. There isn’t a better feeling than owning your own home.