Page 9 - Real estate: a guide for buyers and sellers
P. 9
Finance
Buying a property is a significant and The cheapest loan may also be less flexible
ongoing financial commitment. As a and have fewer extras than other loans.
buyer, you should spend time working
out exactly what you need and can afford. Speak with several lenders about your
circumstances to work out the best type of
Get your finances in order before you loan. You can ask them to justify the rate,
start looking for a property. For help to fees and method of repayment. Take into
make smart choices about your personal account what each lender is offering when
finance, visit moneysmart.gov.au. making your decision.
Choosing a lender Most lenders will approve a loan in
principle (‘pre-approval’), allowing you to
Choosing the right home loan is as be confident of your spending limit. Pre-
important as choosing the right home. approval is only valid for a limited period
Researching and understanding the home and needs to be renewed after this period.
loan market will help you to choose the
most appropriate loan for you. Pre-approval does not guarantee loan
approval. The lender still needs to make
You can use mortgage additional enquiries into your financial
calculators on financial providers standing before approving the loan.
websites to work out your loan
repayments. You should speak to your lender about
what pre-approval means.
The main types of lenders are:
Typically there are three areas that
• Banks lending providers look at when approving
• Building societies your loan:
• Credit unions
• how you will service the loan
Mortgage brokers act on behalf of lenders. • what equity you will have in the
There is intense competition amongst property
lenders who offer a variety of packages, • your credit rating
options and methods of payment. The
loan that appears to be the cheapest
because it has the lowest interest rate may
not necessarily be the cheapest in the long
term when fees, ongoing charges and
penalties are included.
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