Are you ready to embark on the journey to home ownership?
If you’re a first home buyer, we understand it’s both an exciting and daunting time!
Before diving into the home loan process, it is important to understand your financial well-being. Here we’ll guide you through the steps, from assessing your borrowing power to exploring loan options and understanding hidden costs.
With the help of our experienced home loan consultants, you’ll be well-prepared to secure your dream home. Let’s get started!
Setting the financial stage
Before delving into the home loan process, it is crucial to comprehend your financial well-being. Here’s how to get started:
- Income and Expenses: Gain an understanding of your monthly income and track your expenditures diligently.
- Debt-to-Income Ratio: Calculate this ratio by dividing your monthly debt payments by your monthly income. Your Debt-to-Income Ratio can greatly affect your borrowing ability. We’ll discuss this more in a moment.
- Deposit: Start saving early for your deposit, typically ranging from 10% to 20% of the property’s price.
- Automated Savings: Consider establishing an automated savings plan to assist you in reaching your deposit payment goal.
Assessing your borrowing power
Knowing your borrowing capacity is crucial for a realistic property search. While online calculators can give you a ballpark figure, they often lack the nuance and personalised advice that first home buyers need.
For a comprehensive and personalised assessment, it’s highly recommended to speak to the expert team at Well Money. Our team will delve into the specifics of your financial situation, help you understand loan options that best suit you, and even offer strategies to improve your borrowing power.
Credit Score: your financial report card
Credit score is a numerical representation of an individual’s creditworthiness. It is based on factors such as payment history, credit utilisation, length of credit history, and types of credit used.
A higher credit score indicates a lower credit risk and can result in better access to loans and lower interest rates.
A healthy credit score opens doors to better loan terms. Here’s how to maintain it:
- Timely Payments: Ensure all your bills are paid on time.
- Debt Reduction: Strive to minimise any outstanding credit card debt.
- Regular Checks: Utilise budgeting apps to remind you of due dates and periodically monitor your credit score.
Document checklist: Be prepared
Proper preparation can speed up your loan application process. Remember to gather the following documents:
- Identity Proof: Passport, driver’s licence, etc.
- Income Proof: Pay slips, tax returns, bank statements.
- Savings Proof: Bank statements, investment portfolios.
- Liabilities and Assets: Credit card statements, property valuations
The power of Pre-Approval
Pre-approval holds advantages in the property market for first home buyers. Benefits include:
- Seller Appeal: You become a more appealing buyer.
- Speed: You can act swiftly when you find the perfect property.
Hidden Costs: What To Look Out For
Additional costs can catch you off guard. Familiarise yourself with:
- Stamp Duty: A tax imposed on property purchases.
- Inspection Fees: Costs associated with property inspections.
- Legal Charges: Fees for legal services related to the property purchase.
With a wide range of loan options, we will help transform your dream of owning a home into a reality. If you’re a first home buyer, reach out to Well Money today and take the first step towards reaching your home ownership goals.
