Q: What are the steps in getting a low deposit home loan?
- Determine your borrowing capacity
Before you begin your home loan application, it’s important to determine your borrowing capacity. This will help you understand how much you can afford to borrow and what kind of property you can realistically afford. You can use online calculators or speak with a mortgage broker to help you determine your borrowing capacity.
- Find a suitable lender
Once you have determined your borrowing capacity, you will need to find a suitable lender for your low deposit home loan. You can research online or speak with a mortgage broker to compare different lenders and their loan products. You will need to consider the interest rate, loan term, fees and charges, and any special features such as an offset account or redraw facility.
- Prepare your documentation
To apply for a low deposit home loan, you will need to prepare a range of documentation to support your application. This may include:
- Proof of identity, such as a passport or driver’s license
- Proof of income, such as pay slips or tax returns
- Bank statements for the past six months
- Details of your assets and liabilities, such as any existing loans or credit card debts
- Apply for pre-approval
Once you have found a suitable lender, you can apply for pre-approval for your low deposit home loan. This will give you an idea of how much you can borrow and help you determine your property search. Pre-approval is not a guarantee of approval, but it can help you in the property search process.
- Search for a property
With pre-approval in hand, you can begin your property search. Be sure to consider factors such as location, size, and condition of the property. You may also want to consider getting a building and pest inspection to ensure the property is in good condition.
- Finalize your loan application
Once you have found a suitable property, you can finalize your loan application with your chosen lender. This will involve providing additional documentation and information about the property, such as the contract of sale and a valuation report. Your lender will assess your application and provide you with a decision on your loan.
Finally, you’ll need to settle the loan by paying the deposit and any other upfront costs, such as stamp duty and legal fees. Your lender will then transfer the loan funds to the seller’s account, and you’ll become the owner of the property.