The Reserve Bank of Australia has stated that it has no intention to raise interest rates this year, so it comes as no surprise that the official interest rate remains at a historic low of 0.10%pa.
Home loan mistakes
Applying for a home loan is a task that requires you to tick several boxes. Some oversights can make it even more challenging to secure a home loan. Here are some things you need to avoid:
- The cash grants will reportedly be for more extensive renovation projects. They will require renovators to match the cash grants, said to be between $20,000 and $40,000. Limits and conditions are expected to be placed on the type of renovations included in the grant. It is also likely to apply to new home builds mainly.
- Not being realistic about your budget. Some people aim too high and subsequently find it difficult to service their loan. Some aim too low and need to make another application and/or refinance when reality sets in.
- Not taking peripheral fees into account. Don’t forget to include strata fees, council rates etc., when considering your budget, as they’ll affect your repayment capacity.
- Not looking into your credit history. This can make or break your loan approval, so ensure you have a good credit report – if anything needs to be “cleaned up”, do it before you apply.
- Making too many applications. Every application is recorded to your credit file, and if there are a number of them, you’ll likely be labelled a high-risk borrower.
- Not reading the fine print. That low-interest rate loan may sound great, but it could turn out to be expensive. You need to understand the extra charges, the fees and the Lenders Mortgage Insurance that may come with it.
If you’re in the market for a home loan, we can help you avoid these mistakes. Please feel free to contact us to discuss your options.
