Dana from Mortgage Broker Melbourne states that just a small percentage of home loan borrowers can expect to receive approval on their mortgages in 2017 (as low as 35% according to statistics). With this percentage expected to decrease over the course of the next few years as a result of banks tightening their grips on who they lend their money to – securing a mortgage is becoming increasingly difficult.
This is why mortgage brokers are on hand to help borrowers that may find themselves in need of support during their application process. By comparing the lowest interest rates and helping applicants to find the cheapest home loan deals, brokering agencies can typically help potential borrowers to save money, time and effort. But in order to take advantage of their services, it’s a good idea to get to grips with the inside factors associated with a mortgage.
Things like the processes that a borrower will need to undertake, the way in which interest can effect repayment potential and the sums that an applicant might need to demonstrate that they can afford each month should all be considered. But these factors are just the tip of the iceberg.
An inside look at home loans
There are dozens of loan types out there and where some are better suited to particular activities and needs; mortgage loans are there to help buyers when it comes to covering the cost of their property purchase. In Australia, most borrowers will need to be able to cater to the following requirements:
- A deposit on the loan (can be as low as 5%, but will often be higher for first time borrowers)
- An agreement regarding repayment terms (monthly, fortnightly, weekly)
- A fixed or variable interest rate
- Financial documentation to demonstrate earnings, annual income and so on
These four factors are widely regarding as the entry-point for borrowers and although some banks might vary their terms and conditions – the purpose of each factor will typically be the same. For example, with the help of a mortgage broker in Melbourne, it can be possible to compare interest rates from a variety of banks.
With this information, the right type of home loan can be applied for. During this phase, the deposit amount can be understood as well as other factors such as whether the loan will feature fixed or variable interest rates. Choosing the right type of mortgage can be very beneficial and it can also save thousands of dollars over the course of a repayment plan.
In order to be considered eligible for a loan, the borrower must submit their interest to a bank and then provide a variety of financial data and formal documentation to prove their earnings and ability to meet their repayments. This is how the majority of mortgage applications will take place and for further information, it can be beneficial to get in touch with a home loans broker.