How Big of a Sum Will It Be?
How much are you going to borrow? This is the most important thing to consider, as the money you get would influence the type of home, you’ll be able to buy. If you want a home with many amenities, it’d be pricier. But if you look in less urban areas, you’d find bigger houses that are not going for too much.
How much you’ll be able to borrow is influenced by how much cash you make. If you’re purchasing the property with your partner, the income from the two of you would be viewed as one.
What’s Your Credit Score?
There’s no way you’ll be able to borrow without a good credit score. The higher it is, the better the bank will be able to tell that you’ll be able to pay the mortgage off. There are several things you can do to improve the score, thankfully. The best would be to pay off any debt you may have.
If the score isn’t good, you can borrow an unconventional loan. It’d most likely be from a finance house. The thing is, the interest rate would be very high.
What Type of Mortgage Are You Taking?
There are two main loans you could take to buy a home. The most common would be a regular mortgage, while the other would be an investment loan. The latter is taken to flip properties. You’ll likely be able to borrow a much larger sum through an investment loan.
When looking for a mortgage broker Melbourne thankfully has many that’ll help you secure both types of borrowing.
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What’s the Payment Period?
If you’re borrowing a large sum and paying it back in a short period, the monthly instalments you’ll have to pay would be a lot. The beauty of borrowing for a property is that lenders let you have payment periods of upto 20 years. Does this mean you should take out a mortgage for this long, though? No way. You want the headache over as quickly as possible.
You’re advised to not apply for anything that you won’t be able to fully pay in 5 years.
How Much Interest Will You Be Paying?
Let’s say you borrow $100,000. You won’t be paying the bank much this much. The end amount could be well over $150,000 thanks to interest. Your credit score influences how much interest would be charged, which is why you’re advised to improve it.
There are two types of interest rates. One could be fixed, which is pretty self-explanatory. And the other would be floating, depending on how the market is doing.
Final Thoughts
Let’s sum up what was discussed. There are many things to consider, but the most important would be the sum you’re applying for. How much your income would influence this. Your credit score is also important, as, without a good one, borrowing would be hard.