Getting a first mortgage loan is often a dream come true for most Australians looking to buy a residential or commercial property. When it comes to a first mortgage, Australia has a multitude of lenders who are all competing for your business.
With this in mind, let’s look at some things to consider when it comes to a first mortgage and some top tips on successfully securing the finance you need.
#1 – Is a bank your best option?
Traditionally, banks have been the institutions that Aussies go to when they want to apply for a first mortgage. However, there are now lots of different types of non-bank lenders, such as private lenders, fintechs and specialist lenders. So on this note, it’s worthwhile questions: is a bank the best option? This is particularly pertinent if you’re seeking a short term first mortgage, as traditional lenders usually offer longer-term loans with repayment terms up to 30 years. Unfortunately, these long term first mortgage loans don’t always suit everyone’s needs.
#2 – There is a short term first mortgage option
If your situation is better suited to taking out a first mortgage over a much shorter term, there are options available. The good news is that many non-bank lenders, fintechs, specialist lenders, and private lenders provide short-term first mortgage loans. If you only need access to the funds for a shorter period, a private lender will generally be able to offer you a first mortgage loan with terms in the vicinity of just two months and up to 36 months to pay. Of course, this setup won’t suit everybody, but it’s good to have the short term option if you prefer it.
#3 – Do your research to find the right lender
It’s important to take your time and do your research to find just the right lender and first mortgage =to suit your needs. Every lender is different. A loan comparison website can be helpful to navigate the offerings of multiple lenders. Once you have found a couple of lenders that seem to fit the bill, look over their websites, read the fine print, and also seek out reviews from people who have actually used that particular lender for a first mortgage. A good example is Mango Credit reviews. It’s important not to sign anything until you’re certain the lender is the best choice. A mortgage broker can also be a tremendous help in this selection process. The Finance Brokers Association of Australia (FBAA) is a good way to find a broker in your local area.
#4 – Have all of your details and supporting documentation ready
The more organised you are before you apply, the easier it will be.
Before making an application for a first mortgage, make sure you have all of your personal and financial details ready, along with any supporting documentation that will be required. This will simplify and speed up the application process. Supporting documentation is likely to include proof of your identification, as well as proof of your income.
#5 – Check your credit score
A credit score is a score based on your credit history. The better your history, the higher your credit score will be. There are a number of websites that you can go onto to check the health of your credit score.
It can be a good idea to do this prior to applying for a large loan like a first mortgage loan, as your current credit score will let you know whether you’re likely to be approved for a loan or not.
#6 – Consider a lender with an online application process
Online applications are becoming an increasingly popular way to apply for a short term mortgage. Many private lenders provide this option and often require minimal documentation to approve the loan.
Yanis Derums is the Founder and Director of Mango Credit – a leading private lender that specialises in providing bridging loans for personal use and business short term loans for commercial and/ or investment purposes. Yanis has extensive experience with financial analysis, the credit assessment, product structuring, and general business management