Buying a home can be exciting, a little bit frightening and incredibly confusing.
From what kind of home to buy, where to buy it, how to find it and, once found, how to make sure everything checks out, there are so many questions to answer and so many unfamiliar processes to navigate.
One of the big questions is “how are we going to pay for it?”
Borrowing to buy a home is often the largest investment a person will make in their lifetime.
Diverse Lending Solutions mortgage brokers Brooke Davies and Pete Lever offered some of their insights into the process in this quick Q&A.
Q. How much of a risk is taking out a home loan?
A. There is always an element of risk associated with any lending. Those risks can be mitigated by ensuring you set up the right loan structures and strategies for your personal risk appetite.
Knowing what you are comfortable with and having that conversation with a professional is essential.
Q. What is the first thing people need to think about when looking for a mortgage?
A. Think about how much you can really afford to borrow. Understanding your budget, financial needs and what your new repayments will look like as well as the associated costs for the life of the loan is important.
Q. What’s the difference between using a mortgage broker and going directly to a bank?
A. Choice. Mortgage professionals (brokers) have access to a large number of lending institutions, all with different specialisations and niches.
A bank will generally have one set of products which may or may not suit your needs.
A broker will position you with the most suitable lender and product.
Q. How has financing property changed over the past 10 years?
A. The Australian government has introduced many regulatory changes in the past decade.
The majority of these have been proactive approaches to encouraging responsible lending practices.
The most recent change has been a strong focus on true living expenses and full transparency of personal spending.
Q. What changes do you expect to see in the next 10 years?
A. The advancement of FinTech and cloud-based software will streamline the loan application process meaning less delays on overloaded bank approval systems equating to faster turnaround times.
You will still need to talk to your broker about your needs, but the time to approval will be much quicker.
Q. Mortgages are often repaid over decades. Are there things people can do to change their current mortgage to take advantage of changes within the industry?
A. The competition between lenders is high and this can provide big benefits to customers who have a good relationship with a savvy broker who routinely reviews their loan structure and ensures that it meets their current goals and objectives.
