The home loan application process can be long and complicated, especially for first home buyers. Fortunately, there are ways to make it easier.
With so many steps involved, people often don’t know where to start when applying for a mortgage.
In order to help streamline the process, here are four things you should keep in mind.
1. Do your research into lenders
Like any major decision, the first step is to do your research. When it comes simplifying to the home loan application process, finding the right lender is critical.
The home loan market is highly competitive and with hundreds of lenders vying for your attention. So it shouldn’t be difficult to find one that offers the products and features you want with an attractive interest rate.
Rather than opting for an incumbent bank with outdated legacy systems and clunky processes, try to expand your pool. Look into the variety of lending options available such as neobanks and digital non-bank lenders like WLTH. We often offer market leading rates and the ability for streamlined faster approvals and settlements.
2. Get professional advice
If searching for home loan lenders confuses you more than understanding the difference between ‘tomato sauce’ and ‘ketchup’, it might be time to seek some professional advice.
You might have a friend or acquaintance that works in the space that can offer you advice from their personal experience or feedback. Or if you need to seek wisdom from a specialist such as a mortgage broker, don’t be afraid to ask questions. A mortgage is a long term commitment and the home loan application process is arduous. So it’s best to rid yourself of any doubt or confusion before you sign on the dotted line.
Word of mouth is a powerful tool you shouldn’t overlook. Who knows, asking around might even open your eyes up to a provider or service you’ve never heard of or considered before.
3. Make sure your finances are in order
Before you apply for your home loan, it’s best to make sure that you have your ‘house’ in order. Know your finances back to front, including what you can afford and what your limits are.
Be realistic. There’s no point applying for a multi-million dollar home loan if your salary can’t easily service it. You want to still be able to live comfortably. You don’t want to be scraping the barrel when it comes to paying it off.
It’s also important to pay attention to any outstanding debt you currently have. This includes any accumulated debt from Buy Now, Pay Later platforms such as Afterpay or Klarna. These can have a remarkable impact on your credit score and debt-to-income ratio. A poor score in either of these can impact your ability to apply for a home loan.
In addition to this, beware of trying to apply for a home loan if you’ve just accepted a new job. There might be some limitation or extra scrutiny from lenders – especially when it comes to the Big Four.
4. Be prepared
Congratulations, you’re finally at the stage where you’re ready to start the actual home loan application process.
As exciting as it may be, to ensure the process is as simple and carefree as possible it’s crucial that you’re prepared and have your paperwork in order.
Most application forms require supporting documents such as your ID, recent payments, bank statements, proof of employment, as well as evidence of any liabilities and expenses you regularly have to deal with. To ensure you receive the quickest and most accurate assessment possible, it’s a good idea to have these all ready to go.
Digital providers with new-age authentication systems are great at streamlining this process, but if you’re dealing with a traditional bank, expect lots of paperwork.
Being organised ahead of time will make the home loan application process that much smoother. It will also help avoid hold-ups due to administrative issues.
Taking a little bit of time now to get prepared will put you ahead of the game and into your new home much faster.