Entering the Home Loan Market:
Tips from an Adelaide Mortgage Broker
By Ben Spyker Dip. FMBM, BCOM
As a mortgage broker in Adelaide, I have noticed that the borrowing standards used by banks in today’s economically unstable world are so much tougher than they used to be.
More than ever, the borrowers of today must become educated and do their research to ensure that their path to finance approval, and ultimately ownership of their new home, becomes a reality.
Specific to Home Loans in Adelaide, SA
No longer is there any guarantee that a borrower will be successful in their application for finance, so the very first requirement is adequate savings. Your financial institution’s lending standards have changed (in South Australia), and they will now require a minimum of 10% deposit on your home loan.
The initial 5% deposit is required for Stamp Duty and the other 5% is for the actual deposit on your home. Your financial lender will require that you show ‘genuine savings’ – meaning proof that this amount has been saved over a period of time. This is their way of ensuring that you have the capacity and ability to save.
These new rules by the lending institutions have disappointed many potential home owners because, even though they have little or no deposit, they do have the income to service the loan – this is particularly true of people paying rent.
Below are a few helpful tips which may assist you in entering the home ownership market just that little bit sooner.
When a bank is assessing a loan application they generally take two things into account:
- Are you able to afford it?
- Do you have sufficient deposit?
If you’re planning on entering the home market, it’s really important that you meet with a Mortgage Adviser a few months in advance, to discuss the process and requirements, and to create a plan for your home purchase. The reason for this is that it doesn’t have to be a difficult process to purchase your dream home. You just have to be organised!
If you’re organised, there’s every reason to believe you’ll be accepted for a home loan.
Follow these simple steps, and your dream of owning your own home will soon become a reality.
- Immediately set up a savings pattern. Your financial institution will be looking for your savings history showing continuity of savings, and your ability to manage your money.
- This one may sound a little strange, but don’t use your savings to pay off debt.** Remember – no savings (deposit) means no loan. (**You are welcome to phone and ask me to explain myself!)
- If you’re currently employed in a well-paying job, then stay there. If you decide to move later, then that’s another story. Your lender will be looking for employment stability, so stay in your current position for the time being at least.
- When making application for a loan, be realistic. You must be able to service the loan, so be sure you only ask for what is actually required.
- Do you have a family member who would be prepared to go guarantor over the loan, instead of waiting for a deposit?
Give us a call on 1300-668-361, and we can help you make the perfect plan to ensure your loan application is successful.
This is what we do, and we do it well. We’re here to help!
Ben Spyker is the head Mortgage Broker at Adelaide Mortgage Adviser. He has background qualifications and experience in Mortgage and Finance here in South Australia. You can learn more about Credit Advisers and find out how we are regulated here on the MFAA site.