Getting Your First Home Loan or Mortgage: Not That Hard!

   

One of the reasons people cannot really make up their mind whether to continue renting a home or get a home loan and buy one themselves is that the thinking that getting homeloan must be quite tricky. Fortunately it’s not. In this article we will outline the big picture process of getting a homeloan and you will see yourselves that it’s not that hard.

The Overall Process

1. Based on your income, debt, current situation and history, the lender or its agent will determine how much you can borrow and give ‘conditional approval’
2. You go for home hunting: aim a property with price at least 10%-15% cheaper than the maximum given by lender.
3. Once you found one, you need to take the property off market because you have reserved that property, so during the process no body else can buy that too.
4. The solicitor/conveyancer of both side (buyer and seller) will exchange the contract and review all the clause within the contract
5. The lender then will do valuation. If the selling price is less than the valuation you’re good to go, if the valuation is less than selling price this is a problem: you need to come up with the difference or find some other property
6. At the same time you may need to arrange some additional inspection to determine the quality of the building: building inspection , pest inspection, etc
7. Once satisfied with the valuation, the lender will give you a big pack of ‘Loan Offer’ which is the contract of the loan, all  term and condition.
8. You sign the contract and you got your self a home loan
9. Then finally there will be settlement date where the lender give the money to seller, the seller give the title of ownership to the lender (lender will hold it as security) but give the key to you.  From this date on, the property have been yours mortgaged to the lender…
10. You start repay the home loan on monthly or fortnightly time frame

What You Need To Do

1. Get yourself a good mortgage broker (Read here: Why You Should Always Use Mortgage Broker For Your Homeloan) and good conveyancor/property solicitor.
2. Prepare your paperwork: official ID/password, credit card bill, term deposit statement, share/stock  holding statement, personal loan statement, car loan, saving account statement, statement from your employer or tax return if self employed
3. Go meet your mortgage broker: he/she will advise you what the maximum property that you can buy, potential lender(s) that will give you a home loan, etc
4. Go find a good property that you like within your budget
5. Once you found one: contact your conveyancor/solicitor, contact your mortgage broker. You have to tell the real estate agent to take the property off the market. Usually you only need to give small deposit: $1000 or even $500 cash. But this is highly depended on the custom of the real estate agent. Just ask.
6. Additionally you might need to arrange some inspection: building inspection, pest inspection, etc – ask your conveyancer/solicitor when you can do this – the seller still need to determine this.
7. Wait until the lender give you offer and sign it.
8. You have bought yourself a home.

See, not that hard, isn’t it ?

Related Posts

• Why You Should Always Use Mortgage Broker For Your Homeloan
• Taking a mortgage ? Do Not Change Your Lifestyle Dramatically
• Offset Account: A Must Have For Your Mortgage
• Be Careful With “Interest Only” Homeloan/ Mortgage: a Potential Problem You Should Know
• Mortgage: Change To Fixed Rate or Keep It Variable ?

Denis Kristanda  

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