Applying for a home loan should be an exciting time, whether it’s your first time going through the home loan process or you’re looking for a fresh start. During the home buying process, many people turn to brokers as they have access to a range of home loan lenders and a wealth of knowledge. To ensure that you are armed with the right questions for your broker, we have put together a list of the essential questions to find the best loan for your situation. 

Find out if you are eligible
It might seem obvious, but factors such as your employment status (including history, financial situation, your credit history), age, residency and if you are looking for your own home or an investment property, can all have an impact on your loan eligibility. Ask your broker about these factors early on so you know what requirements you need to meet. Don’t be afraid to speak openly with your broker, giving them an opportunity to gauge your eligibility and tailor a loan to suit your needs - that’s what they’re there for!

Calculate how much you can borrow
Engaging a mortgage broker early can give you a great head start on just how much you can afford to borrow. This is because mortgage brokers have up to date knowledge of the home loan market from a variety of lenders. Engaging a broker will help you estimate your borrowing power, as they take into consideration the lenders’ policies, as well as aligning your personal and financial situation. 

Understand how much your repayments will be
If you’re not much of a mathematician, don’t stress! Your broker will be able to crunch the numbers for you when enquiring in a home loan, in particular how much your repayments would be. It is a good idea to discuss your potential repayment amount and preferred payment frequency, which includes comparing fixed versus variable rates. These calculations will include the interest amount you will be required to pay and can vary between lenders. Some lenders such as HomeStart structure their repayments according to your affordability so they do not vary over time, instead, your loan term will increase or decrease respectively. 

Ask how much you need for your deposit
With all the preliminary information finalised, you need to understand the requirements around a deposit. A deposit is a sum of money that must be paid upfront to the lending institution and contributes to a percentage of the total loan amount. As this varies with each loan and individual’s situation, establishing exactly how much you need can become confusing. Your broker can provide the amount required for your deposit and will also guide you on the other fees and charges that are payable when purchasing a home. 

Common fees you would incur are Lender Mortgage Insurance (LMI), which is insurance you pay for lenders to protect themselves if you are unable to make your repayments, as well as stamp duty and conveyancing fees. Some lenders like HomeStart do not charge LMI which could save you thousands in upfront costs. This will allow you to weigh up your options and make the decision that will best suit your personal and financial needs. 

If you think you are ready to begin the home buying journey or to make a fresh start, Apply Now with HomeStart and a team member will be in touch. If you would like to learn more about our low deposit loans, Shared Equity Option or unique range of product features, contact HomeStart today. Home ownership could be closer than you think.