BUYING YOUR FIRST HOME Buying your first home can be overwhelming. With so much information available and so many banks offering different types of loans – where do you begin? How do you even start this process? How much can you borrow? What documents do you need? Should I choose a fixed loan or a variable loan? What does an offset account do? What is LMI? The list of questions are endless. This guide is designed to help prepare you to get a loan from a bank. As each individual’s financial situation is unique, there are certain questions that cannot be answered unless you speak to a qualified mortgage broker such as PBP. So, lets get started!
step 1
COMPLETING A FINANCIAL FACT FIND (OR PRELIMINARY ASSESSMENT)
Ok, so this is a pretty lengthy document and one you may look at and want to run in the opposite direction... BUT, it is totally necessary and is the basis that we prepare your proposal and plan of attack! The financial fact find collects all your personal information including your employment history, living arrangements, assets and liabilities. One thing that has become a focus with the banks over the past 12 months is living expenses. The banks want to see how you spend your income and this means not just looking at your monthly personal loan or car loan repayments, they are looking at your discretionary and non-discretionary items. This not only includes things such as gas and electricity, but includes after-pay, insurance, phone, Foxtel, gym membership, health cover, child care etc etc. They expect each applicant to give a full breakdown of itemised expenses including these items for each month. Most banks request to see your last 3 months transactional bank statements to verify your monthly expenditure. After you complete this financial fact find, we review this and can prepare for you a full proposal which includes: • Maximum borrowing capacity • Maximum purchase price • Minimum savings you need • Suitable loan types • Monthly repayments
So you now know how much you can borrow and afford, what your monthly repayments are and what loans you qualify for... what’s next?