Before submitting an application for a home loan, there are three preliminary steps you need to follow to ensure a hassle-free repayment. Since repaying the loan would take some time before you complete it, you would want to seriously consider your personal budget, the amount you can borrow from private institutions, and the assistance you can get from the government.
Resist TemptationsHome loans offered by numerous institutions today are tempting. If you are not careful about them though, these loans could put your finances out-of-order. To avoid this from happening, resist any temptation to apply for a mortgage until you are sure you will have enough money to pay for a monthly mortgage. A mortgage broker can help you estimate the amount of your monthly dues based on the amount you wanted to borrow for your dream house. With the estimate in mind, compute any additional money you will have after other expenses and taxes to see if the difference would cover your monthly mortgage payment.
Also, take into account any changes in your salary at least in the next five years or so. It should be easier if your company has a minimum rate of annual salary increase. Otherwise, do not consider any increase in your salary at all. This would help you establish a mindset of having just enough to pay for mortgage and not go easy on your spending. The more conservative you become with your estimate, the sooner you will realize you are ready to move on to the next step of the application process.
Establish a Limit
Once youve determined your budget for home ownership expenses, establish the limit of the amount you can borrow from a lender. A broker could assist you in determining this amount. You and your broker would review the details of your current financial status that includes the following components: savings, income after taxes and non-housing expenses, tangible assets, and other financial liabilities. A mortgage broker should be able to refer you to a lender that can grant you a loan to coincide with your current and future financial capability.
Know Your Options
Lastly, the government can extend a tax-free financial assistance of up to $7000 if it will be your first time to apply for such grant mandated by the federal governments First Home Owner Grant scheme. If you become entitled to possess a property via a legal contract or the house is ready for occupancy, you may qualify for this grant. Upon completing these steps, you can start shopping for residential properties based on what you can afford. As long as you remain consistent with your spending and saving, you should not worry about securing the house you love through the home loans program of a suitable institution.
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