How to navigate the home loan minefield

Peita Davies from MoneyQuest Penrith. Photo: Megan Dunn.
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Buying a house is exciting but can also be a stressful time when it comes to sorting out the financial side of things.

MoneyQuest Director and local Finance Specialist, Peita Davies has some tips to make sure you are in top shape to apply for a home loan.

Ms Davies said people need to be aware when applying for a loan that a bank will go through your bank statements and recent financial history.

“Living expenses is a large part of the assessment, so every time you tap your card to buy a coffee it gets tallied up, and at the end of the day can have a negative effect on a home loan application,” Ms Davies said.

There are other factors Ms Davies said to keep in mind that could help or hinder the process.

“Comprehensive Credit Reporting now gives lenders access to information on all your repayment behaviours whether they are positive or negative,” she said.

“Also, if you withdraw superannuation to add to your deposit that can be a red flag and can have a negative impact on your application.”

A vital tip she said is to utilise the services of a qualified mortgage broker.

“Having a chat to a broker is more important than ever as they are required to act in the customer’s best interest,” she said.

“They have the knowledge of different lenders and are obligated to find the most suitable option for you, which could be with a bank you have never heard of.”

Ms Davies said a broker will also benefit people who are first home buyers entering the market, as they will help guide you through the home buying process and access the best possible loans.

“The First Home Loan Deposit Scheme still has places available, but it’s unlikely you’ll get a place through a major bank, but brokers still have access to lenders with places.”

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