The ultimate guide to getting a mortgage

Being a first-time buyer can feel daunting, but understanding the process of getting a mortgage in Australia can help you to feel at ease during this milestone. We’ve compiled this guide to help you to understand how to get a mortgage, and the various steps along the way in your journey to home ownership. 

How to get a mortgage:

Consider your financial position

If you’re planning to become a homeowner, it is vital to have a critical look at your finances, so that you can get an honest understanding of your situation. Evaluate your overall budget, weighing up your income and regular expenses. Check your credit score, and keep an eye on it, as your credit report will be relevant when you are being considered for a home loan. 

Research lenders

There are a variety of lending options out there for Australians to access when applying for a home loan. You may consider approaching one of the big banks as your first port of call, but there is a reason why 2 in 3 homeowners use a broker instead of a bank. Applying for a mortgage can be daunting, especially if it’s your first home. Mortgage brokers manage the home loan process from application to settlement, and will guide you through every step to make the process as smooth as possible.

Determine your borrowing capacity

When considering your home loan application, lenders will assess your borrowing capacity based on a number of factors, including income, expenses, and existing debts. There are mortgage calculators available that may give a rough idea of how much you can borrow from a lender, but for an accurate estimate it is best to get in contact with a mortgage broker for advice.

Save for a home deposit

Saving for a deposit is understandably often the biggest hurdle for first home buyers. According to a recent ANZ CoreLogic report, it takes around 11.4 years to save a 20% deposit in Australia. While the outlook may appear grim, buying your first home or investment property isn’t out of reach. Have a look at our tips for reaching your home deposit goals sooner.

Choose a mortgage type

There are pros and cons to consider for both fixed-rate and variable-rate home loans, and what is best for you will really depend on your individual situation. Your mortgage broker can give tailored advice on what type of home loan is best suited to your needs. 

Gather your documentation

In order to assess your potential as a client, lenders will need to evaluate various forms of documentation. Some of these may include: income statements, employment details, proof of ID, and details of your debts and assets. It is worth gathering this information in advance to have it ready for your meeting with us.

Submit your home loan application

If you’ve found a lender, organised your documentation, and decided on what type of home loan suits you best, you will be ready to apply for a mortgage. As a part of this process, your mortgage broker will need to order a property valuation from your chosen lender, as well as checking your documentation and performing a credit check, before proceeding with your home loan application.

Review and sign your mortgage contract

Take a moment to celebrate your approval, and then be sure to check all of the details within your contract before signing. If you need any help to understand the terms and conditions of your loan, get in contact with your mortgage broker for assistance.

Get ready to settle

The final step of your home loan application is settlement. Your lender will transfer funds to the seller, making the property officially yours! 

The home loan process involves a fair bit of research and planning, but with the right preparation it doesn’t have to be a daunting endeavour. Our team of expert mortgage brokers can help you with your home loan needs. Book an appointment with one of our Borro brokers today or call the team on 1300 1BORRO.

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