Borrowing a Home Loan? Do Not Make these Financial Mistakes

The idea of a new ‘Home Sweet Home’ may also give you some bitter memories if you lose out on the financial details while borrowing the home loan. You must keep away from basic financial mistakes while stepping into the process of home loan and its approval.

To guide you towards a better borrowing experience, we have a list of key checkpoints that you must confirm while borrowing the loan for your dream home.

* Get a pre-approval on your loan- While assessing your home loan application, the bank/lender will review your income, bank statement, credit card conduct, credit report, and other financials. This is done in order to ensure that you are suitable to borrow and you can afford the repayment of your liabilities. Based on this information, the lender will approve the maximum mortgage amount for your home. Borrowers usually mistake pre-approval for pre-qualification However, both these are two different things, a pre-qualification is simply the bank’s estimate of the mortgage you would be able to handle. Getting pre-approved, however, is the safest option as it’s a full assessment and allows you to make an immediate offer on the home of your choice. For further assistance, please speak to one of the dedicated Your Finance Adviser’s lending specialists.

* Do not avoid investigating- There are chances that the house you are looking for might have hidden electrical, structural, plumbing or other defects. To avoid such blow-outs, it is advised that you hire somebody who is an expert in repairing and construction. 

* Tax implications are not to be ignored- Investing in a new home can have a direct impact on your taxes. You must consult your accountant regarding the tax implications that may occur due to your purchase of the home. Be aware of the tax that you would be required to pay well in advance so that you can plan accordingly.

* Clear small and hidden expenses regularly- You are suggested to keep a track of all the small and hidden expenses that you would incur in the process of borrowing the home loan. You can also reduce the cost by negotiating or simple waiving off certain expenses. You should make sure that your lender is not overcharging you on his fees, credit report or inspections fees, or even government fees, in such cases. Do not forget to check the ‘loan estimate’ with your lender right after your mortgage application.

* Customize your homeowner’s insurance- You always have an option of getting your homeowner’s insurance customized. Make sure that you make use of this and be sure that your policy meets your individual needs. You must also take entire advantage of the available discounts that will reduce your insurance costs. You can also use a home loan calculator with the advice of your Lending specialist to be accurate on your spending estimates.

With the careful check on these points, you can rest assured of not making any financial mistakes on your home loan. For any further assistance please speak to one of dedicated Your Finance Adviser’s lending specialist on 02 8322 6895 to get the best home loan rates in Australia.