Are you planning to buy your first home in Melbourne Australia? Short on funds? You might need a home loan to buy your dream home. But do you know how you will navigate the complex home loan process?
Getting a home loan is one of the most endeavours, requiring much paperwork and some legwork. As an individual, you might get frustrated by the never-ending documentation, but when you are informed and prepared, everything becomes easy and smooth.
We have prepared this comprehensive guide to ensure you don’t get any problems while getting a home loan for buy your new dream home. So, let’s dive deep into it for more information regarding home loans from mortgage brokers.
What is a Home Loan and Its Types?
Most readers might be aware of what is a home loan; however, let’s brush up on our memories and start from the basics. A home loan is a secured loan that is secured to purchase a property by offering it as collateral. These loans offer funding to individuals willing to buy homes at decent interest rates and for long tenures.
These loans are repaid via EMIs, and once the borrower repays all the debt, the property’s title is transferred back to him/her. There are several types of home loans available for individuals and families in Australia; some are as follows: –
- Land Purchase Loans
- Home Construction Loans
- Home Purchase Loans
- Home Improvement Loans
Eligibility Criteria
To get a home loan in Melbourne, Australia and realise the dream of owning a home, an individual has to meet specific requirements. Here are the essential eligibility criteria for a home loan: –
- You must be a permanent resident of Australia and at least 18 years old.
- The applicant must have a good credit score to secure a home loan.
- You may have to deposit 20% of the loan to secure a home loan in Australia.
- You may need to provide the lender with bank statements for the last three months.
- Salaried individuals who have been in the same job for the last 12 months have higher chances of approval.
Note:The eligibility criteria for a home loan vary from lender to lender. You may need to contact your lender for exact requirements to secure a home loan.
Documents Required for a Home Loan
An individual needs to produce some documents upon request to secure a home loan in Australia. The document one requires are as follows: –
- Copy of recent payslip that must not be older than 60 days if you are a salaried individual. However, if you are self-employed, you will need to submit a 1-year individual tax return with notice ATO notice of assessment.
- Photo ID (you can submit your passport or driving license). You can also submit the following documents if you don’t have DL or passport: –
- Utility Bill
- Medicare Card
- Birth Certificate
- Tax assessment notice
- Centrel ink pension card
- If you have rental income, too, then you may need to provide the lender with the existing signed lease agreement. In addition, you have to submit bank statements confirming rental credits as well as tax returns that include your rental income.
- You will also need to provide the lender with a signed contract of sale in case you are buying land or a house; however, if you have applied for a home construction loan, you will need to submit building plans approved by the council and builder’s contract.
The above list may not include all the documents required for a home loan in Australia. You can contact the LTE Loans mortgage broker’s team or your home loan broker directly to get complete information regarding the document requirements.
5 Surprising Benefits of Home Loans
Home loans come with a host of benefits, and before you apply for a home in Australia, you must be aware of all its aspects. So, let’s look at the benefits of home loans without further delay.
- Economical Interest Rate: Individuals can get home loans at lower interest rates compared to other financing options.
- Fast Loan Processing: A home loan requires minimal documentation and lenient eligibility criteria; thus, it gets approved faster.
- Tax Benefits: An individual can claim a deduction for the interest they are paying on the mortgage.
- Easily Available: Almost every bank offers home loan services to individuals and families, so they can realise their dream of owning a home.
Tips for First-Time Home Buyers
First-time home buyers have no clue about how the loan process works and often get frustrated. So, if you are buying a home for the first time, here is a list of tips that will come in handy.
- Before applying for a home loan, evaluate your financial position and determine whether you can repay your home loan through EMIs without compromising your other financial goals.
- Shop around for the best deal and home loan at the lowest interest rate. Don’t forget to check the EMIs you must pay beforehand to ensure everything goes smoothly.
- Be careful while choosing the tenure of your home loan, as the longer tenure you choose, the higher the interest rate you pay. It is advisable that you choose a shorter tenure as it will help you save much money that you would end up paying the interest.
- Ensure you apply for a home loan from a reputable lender; the builder must also be reputed and check the seller’s identity and other proof related to your property, as it will help you avoid many troubles and problems.
Final Verdict
Getting a home loan to buy a house in Australia seems like a complicated process that not everyone can navigate easily. However, with the right information, you can get a home loan from a reputed lender without hassle. This article contains vital information on the eligibility criteria, documents requirements, benefits you get and many helpful tips.
If you are still afraid of the complex home loan process, there is nothing to be worried about; you can contact one of the best mortgage brokers in Melbourne, like LTE Loans and get your loan application approved in no time. Contact us to book a consultation with our loan brokers today!
