While home lenders at banks work solely for a lending institution and can only offer that institution’s products, brokers can help connect you to the lender best fit to serve your mortgage needs by shopping around on your behalf.
Mortgage brokers on the other hand match borrowers to the right products and can negotiate the lowest rate on your behalf, which is why more than half of borrowers today turn to mortgage brokers when it comes to finding a home loan.
To decide whether to provide you with a loan, lenders will generally assess you against five qualities.
1. Your ability to repay the loan
To establish your capacity the lender will look at your employment history and salary to evaluate whether you have enough cash coming in to reliably pay the loan over time. Gone are the days of a bank assessing how much your assets are worth, today banks' focus is the serviceability of the loan.
2. How much cash or equity do you have upfront
Assessing your ability to put down a percentage of the value of the property being purchased up front is standard. The percentages vary, and lenders may approve a 5% deposit.
3. The property appraisal price
Since the property is used as collateral if you are unable to repay the loan, the lender will value the property. Based on the report, the lender will decide whether the property is worth the loan being approved.
4. Your financial history
Your credit rating, expenses and debts will help the lender assess your character as a borrower and whether you are worth the risk.
5. Market conditions
Economic circumstances in the market can influence what interest rate you have access to and whether you need to provide extra security. They can also influence the repayment schedule.
Speak with your local mortgage broker so you can be updated and informed. Sparks Finance is willing to help you understand the sometimes-daunting property buying and finance process in Bathurst. Don’t hesitate to give us a call.
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