5 Financial Tips That Will Help You Get Ready To Buy a Home
Home ownership is a dream that many Australians hold onto each and every day. Even though the world economy has seen better times, home ownership is still a possibility when proper financial planning is put into place. If home ownership is in your near or far future, we’ve put together 5 financial tips that will help you get ready to buy a home.
- The first tip involves your credit history and how essential it is in qualifying for a home loan. Don’t wait until the minute (or until you get a decision from the lender) to find out how your credit history ranks. As soon as you decide that you want to buy a home, start checking your credit and if any negative items are found, start working at clearing them up.
- Figure out how much you’re going to have to save for the deposit. This amount can range from 5% all the way up to 20% depending on your credit history, income, current debts and other factors.
- Don’t constantly switch jobs – lenders like to see a steady employment of the same level of income for a regular period of time. This means that if you like to switch jobs every few months, it may lessen your ability to obtain the home loan that you need in order to make a purchase.
- Speaking of jobs and income, you need to be able to document that your income is sufficient enough to support the amount of the payments that you will be making. Use an online mortgage calculator to give you a basic estimate of how much income is needed to support the payments of the price range you’re look at. If you notice that you will need more income, it will give you the opportunity to find ways of increasing it or saving up for a larger deposit.
- And finally, start reducing your debts as much as possible. The more debt you have, the more it will factor into whether or not you’re able to obtain approval for your home loan. Debt will also factor into how much home you can afford.
As you can see, there are many details that go into owning a home. However, by starting to plan now, it will make the home buying and home loan process easier when it’s time to make your purchase.