More and more overseas investors like to buy a house on mortgage in Australia nowadays. However, without a deep and comprehensive understanding of Australian loan rules, they often get themselves into trouble.
If you want to mortgage a house, there are some tips you should know first.
One, do not provide too much material and information
In most cases, we will believe that, in order to apply for a home loan, it is necessary to submit all the materials that can be provided and believe that more materials, more chances.
This is like thinking that if you use a bank longer, you are more qualified to get loans as an old customer.
However, the truth is, the bank will never evaluate a customer according to their “business period”. Banks always require customers to provide materials in accordance with loan policies. Too much material will not have any extra effects, but only just waste the approval time, reduce the efficiency of the loan, increase the chance of error and unnecessary misunderstanding.
Two, do not tell lies when applying for a loan
Australia has a very strict process for customers applying for loans. If any mortgage applications are found lying about their salaries, their current loans may be withdrawn.
Do not sign on the mortgage application form before all things have been settled. Because the lending institutions are always exaggerated, so that customers may find it is hard to afford the mortgage after signing the paper.
Three, too many credit cards are useless
Owning many credit cards means declaring that your credit history is bad, even if you always pay back on time, there are still many risks for the bank. So owing too many credit cards are a bad thing for getting the loan.
Four, do not hide when you can not afford to loan
When people can’t afford the loans, they may refuse to answer the calls, reject all the emails and so on. In fact, the lender has a lot of ways to deal with the situations if you talk about the difficulties faced with them. However, if you choose to hide, the lending institutions may have no other choice but sell your property.
Five, do not skip the step of checking room
Inspection staff will help you carefully check the house, tell you whether the roof or the basement is leaking, whether the room machinery and equipment are still good and how long the electronic applications can be used. They can test better than you. So do not skip the step of checking room.
Six, Do not pay the decoration fee at once
If the decoration company asks you for one-third of the total cost at the beginning, there must be something wrong. They may escape with all the money you have paid. So, the best advice is, do not pay all the cash before all the things have been settled.
Seven, Do not destroy the mortgage contract after paying off the mortgage
When you pay off the loan, the contract seems useless anymore, after all, now everything is owned by you. However, you should remember that throwing away the contract is a high risk. So the best choice is to find a safe and reliable place to store all the relevant documents.
For people who want to buy a house, pre-approval provides a convenience for them to make a plan. But it should be noted that the pre-approval does not represent the formal loan approval.
On the one hand, under the pre-approval state, the interest rate is likely to change. Banks will adjust the loan products from time to time. So when the customers finally decide to sign the contract, the interest rate may have already risen a lot.
Therefore, the best way to deal with this problem is to lock the rate, the bank can lock the interest rate for customers in a certain period, which are around 30 days, 60 days or 90 days and the cost of this may be just several hundred blocks.
In addition, when the customer plans to apply for the formal approval, the bank will check the customer’s latest income situation, such as payslips. If the customer just leave or for some reason can not provide the latest income, the loan application will be rejected.
Nine, Low interest rate is not always good (the cost of lending)
Many banks take low interest rate as a way to attract customers. But do the low interest rates mean better? Not necessarily.
Some banks have introduced a Honeymoon Rate, meaning that the interest rate discounts are really big at the beginning of the loan(about 6 months to 1 year), and then it will come back to normal rates or even higher than average.
Besides, even if the bank promises that the interest rate discount is permanent, it still can not prove that the product is a good choice. Banks usually do not tell the customers about the annual fee, transfer fee, handling fee, exit fee, etc on their advertisement. These hidden costs may make you spend even more, so, you must ask about the varied costs before applying for the loan.
Ten, Other bills will also affect the loan
Banks are very cautious in reviewing the information of the applicants, and they are concerned about the risks of lending to the applicants. The way to assess the risks is to look at the applicant’s credit report and refer to the repayment record for the other bills.
If there is some bad records like delaying the phone bills, on applicants’ credit report. They may not be approved to get the loan.Because they think that a similar situation is likely to happen on the mortgage.
Similar things like overdue or over limit will be considered as bad records and will also affect the loan evaluation.
Banks expect customers to have a stable income and can repay on time. But it does not mean that a customer with bad credit records are unable to loan, there are still some banks which can accept a certain degree of bad records.