Applying for your first home loan can be really exciting, but it's also easy to feel overwhelmed and unprepared. By following the three simple tips below, you can ensure that you are as prepared as possible, making the application process go quickly and smoothly.
Do Your Research
One of the most important things to do before applying for a home loan is to do your research, as this will help you to be realistic in the process as well as save you time. There are many online calculators that will allow you to get a rough idea of what you can borrow, what monthly payments you will make, and how expensive your new home can be. If you are self-employed or have a low deposit, find out how that will affect you. Look at homes, find out exactly what you can get, and think carefully about whether you are ready for the financial responsibility of owning a home.
Choose The Right Lender
Before applying for a home loan, you need to choose which lender to use. It is generally more convenient to apply with a bank located in your home town, so spend some time on the websites of these banks finding out about the range of loans they offer. As Moneysmart explains, you should be looking for the best combination of a low-interest rate and a short loan length, though there might be other factors you consider, such as taking out a loan with a bank you already use or looking for one with experience helping low-income or first-time buyers. Spend some time looking around, asking family and friends for recommendations, and reading online reviews in order to make the best choice for you.
Prepare Your Documents
There're a lot of documents you'll need to present when applying for a home loan, from valid ID to proof of income. These can sometimes be difficult to gather, especially if you haven't used them for a long time or are self-employed. Finder has a great guide to putting together the documents you will need, explaining that you will need to show the lender two pieces of ID, proof of income such as a payslip, and often other information, such as proof of other assets or a valuation report if applicable. Put together all these documents in a folder, so that they're easy to find during your meeting with your lender, as this will save a lot of time and effort later on.
By taking the time to do your research about home loans and the market in your area, choosing the right home loan lender for you and putting together all of the documentation you will need, you can speed up the application process and make it more manageable for you.