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Acquiring a Mortgage for Brisbane Real Estate

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Are you looking to buy real estate in Brisbane? Thanks to the strict COVID-19 measures that allowed employees to work from home, Brisbane’s property market is predicted to grow by 9.5% in 2021. This is due to the increased demand for property in the area.

If you are looking for a mortgage to buy a Brisbane real estate property, here are some of the options you have.

Get a Mortgage Broker

When looking for a lender, you can hire a mortgage broker to help you find a lender with the best interest rates in the market. Mortgage brokers are home loan experts who are well connected and have studied the market; they know the best lenders to go to for your specific home loan needs.

Advantages of Working With a Mortgage Broker

Not only will hiring an experienced mortgage broker help you get the right lender, but it also has other added advantages that include:

Saving You From the Hard Work

A competent broker will save you from the difficult work of walking around and looking online for different lenders. The broker often has a list of lenders already prepared for you to choose from. They also know which lenders offer friendly repayment terms and interest rates and which brokers to stay away from.

They Are Better Connected to Lenders

It’s the mortgage broker’s job to stay connected and expand their network among lenders; therefore, they have better access to mortgage lenders in the market. They can also negotiate favorable terms for you depending on the volume of clients they bring to the lender.

They Can Help You Manage Some Additional Property Ownership-Related Costs

Costs such as appraisal fees, origination, and application fees are inevitable when working with a new lender. A mortgage broker can help you save money by negotiating with the lender on your behalf to get some or all of the fees waived.

Borrow Directly From the Bank

Most people prefer working directly with a trusted credit union or the local bank instead of getting a mortgage broker. This is often the more familiar option as it’s based on a pre-existing relationship.

If you would like to work with your bank, it’s essential to take advantage of any lower interest rates your bank is offering.

Mistakes to Avoid When Purchasing a Brisbane Real Estate Property

A few decades ago, getting a loan to buy a home was an easy process. Today, things have changed, and even getting a pre-approval is more challenging than it used to be.

Below are mistakes to avoid if this is your first time purchasing a property in Brisbane.

Saving 20% for Your Down-Payment

While it’s advisable to have a 20% deposit to reduce your interest rates, saving that money is near impossible thanks to the high property prices and the increased cost of living. If you want to buy a home worth $500,000, you must save at least $100,000 for a down payment.

You don’t have to save up to a 20% deposit; you can still get a mortgage with a deposit of 8%. There are also lenders in the market who will approve a mortgage with a deposit as low as 5%. However, you must remember the lender’s mortgage insurance costs involved.

Getting a Bank’s Pre-Approval

Getting a pre-approval is one of the biggest mistakes first-time property buyers make. Most lenders today prefer skipping the pre-approval process, while others prefer spending less time evaluating pre-approvals.

Some of these lenders often forget to check some crucial information such as credit card and bank statements, payslips, and your savings history, before getting you pre-approved. This increases your chances of getting your loan application declined despite being pre-approved.

Thinking That You Require Genuine Savings to Buy a Property

Do you still think that banks require you to have genuine savings to get approved for a home loan? What happens if one of your relatives gifts you a large sum of money or you get a big tax refund?

Banks that require genuine savings are often looking to confirm your character and how good you are at managing your finances. However, not all Australian banks will require proof of genuine savings; some may ask you for your 6-12 months of rental history. You may get the rental history from a licensed and reputable real estate agent or via your rental ledger.

Purchasing a House Above Your Budget

When you start looking at properties, you may be tempted to go for the more appealing and expensive property. Don’t fall into this trap. Always stick to your budget.

Purchasing a property above your budget might hurt your financial health. Buy property within your borrowing limit for more manageable repayment.

Doing Things That Get Your Home Loan Application Rejected

According to a report, 40% of all home loan applications in Australia were rejected in 2019. Below are the reasons why most mortgage applications are declined in Brisbane:

  • Forgetting about past interest-free loans, AfterPay accounts, or even that credit card you haven’t used
  • Being paid into different bank accounts
  • Frequently changing your address
  • Changing jobs too often

Today, banks are not taking any unnecessary risk when lending their money to consumers. Therefore, you must be more vigilant about your financial choices if you’re looking to get a home loan.

Underestimating Brisbane Real Estate Prices

Unfortunately, properties in Brisbane are not cheap. And even if the house you found is within your budget, you must also include other property ownership-related fees in your budget. These fees include property insurance, stamp duty, mortgage insurance, Council and Water Rates, and government fees.

Are You Ready to Purchase a House?

Purchasing Brisbane real estate property is not an easy process. There are essential financial considerations to factor in before making the purchasing decision, from saving the deposit to looking for a lender. Ensure you avoid making the above mistakes when you find that perfect home for you and your family.

Please take a look at other posts on our site for more tips.