Buying your first house is an exciting experience. You will finally have a home that you can call your home and do with it whatever you wish. However, before you can purchase a house and move into it, you need to have the money to pay for it. While you will certainly want everything to be perfect from a mechanical engineers point of view, you should never lose sight of other important factors.
It can be a stressful process when you are applying for a mortgage. Having not gone through the process before, you won’t know what details you need to provide and what precautions you need to take.
This is why you should always deal with reputable and licensed mortgage brokers in the Melbourne area when you are looking to apply for a mortgage. What you do before applying for a mortgage can make or break the chances of your application being accepted. Here is some advice to keep in mind, which can help you get an approved mortgage.
Be In Full Time Employment
While this may sound obvious, it is one of the most important factors that lenders consider. You need to be working in a job that has consistent hours and pay. You also need to have a stable position in the job as well as having an optimistic future. If you are an independent engineer that works on a freelancer basis, this can often work against you.
If a person is constantly moving between different jobs, this sets off warning bells to lenders. They will question whether this individual is reliable enough to meet the regular mortgage repayments if they are constantly switching employers.
Identify Exactly How Much You Need To Borrow
You don’t want to borrow too much or too little when you are trying to buy a house. It is important that you have a set budget when it comes to buying a house.
By discussing with your mortgage broker about how much you can reasonably expect to get from the lender, you will be able to tailor your application. If you cannot gain enough capital, you need to move onto another party.
Have a Detailed Plan for the Six Months Before You Apply
It is very important that you are organised and have all of your affairs well in order. The normal recommendation is to plan six months in advance of your application in order to get your financial situation cleaned up.
You should create detailed records and documentation of all of the important variables that the lender will consider such as savings record and repayment capacity. You need to be able to show the lender how you can make consistent payments of the correct amount on a regular basis such as rent payments. You should make sure that all transactions have a paper trail.
Lenders will not take into account cash payments for things such as rent.
Avoid Extravagant Purchases and Short Term Loans
You don’t want there to be a recent record of this type of activity. Lenders want to deal with someone who is disciplined with their finances and not prone to making substantial impulse purchases.
Every month, you need to ensure that your credit balance is at zero and that you have no other outstanding debts.