The First Steps to Home Ownership
Category Property Advice
One of the greatest milestones in life is having a home to call your own. This is usually accomplished in your mid 50’s-60’s when you’ve finally paid all your home-loan instalments to your bank or bond originator (lenders). For many, this will happen when they are retired or on the verge of retirement. Since the latter part of life is about (hopefully) living debt and stress-free, your younger days require more risk and working toward buying your dream home in your most desired location. But what will this process look like?
Foundation Phase
The first steps towards home ownership is building up a good credit rating and saving a healthy sum of money for a deposit. Establishing a good credit rating will require you to pay off all your monthly accounts on time, whilst also ensuring that you don't owe too many creditors money. If you have taken out too many loans, there is a good chance that your home loan will be declined since most lenders believe that owing large amounts of outstanding debt is an indication that you will not be able to keep up with every home loan repayment. When it comes to saving up for a deposit, lenders will typically require you to come prepared with at least 10% of your intended property’s value in cash.
The key is to start saving towards a deposit as soon as you start earning an income so that when it is time to take out a home loan, you can pay a good deposit. Furthermore, if you are able to save up towards a bigger deposit, approximately 15% or more of the property’s value, lenders will view you as a lower risk and may, therefore, be willing to grant you a higher bond at a lower interest rate.
Obstacles on your Journey
When you’re trying to secure a deposit with a lender, you may soon discover that the process is not always successful and your application may be declined even though you can afford to repay the home loan. If you experience this, be sure that you apply to multiple lenders as this will increase the chances of a successful home loan application. The reason for this is simple. Most lenders have a unique credit assessment process and this means that if you are declined by one, another may approve it as their criteria may differ. Additionally, different lenders can offer you a lower or higher credit, depending on their criteria. Due to this, home buyers are advised to explore the various options to uncover the best bond available.
Finding the Right Lender
If you find yourself with multiple lenders who have accepted your home loan application, you will then need to choose the right lender who accommodates your unique needs. The right lender will evaluate your financial status as an individual by taking into consideration all aspects of your debt, from your credit history to your general financial management.
End-User Finance
If you’re currently looking for a reputable bond originator, then End-User Finance may be perfectly suited to you. End-User Finance has a string of awards to its name due to its world-class business ethic that places your home loan as a priority. For 11 consecutive years, dedicated consultants have helped the company receive the nomination for best independent bond-originator in SA while in association with Mortgage Max. Over and above exceptional service, the company offers competitive interest rates and assesses applicants based on their individual merits.
As you take the first steps towards home ownership, it is important to keep in mind that the journey may be challenging. Once you’ve saved enough funds for a deposit and built a positive credit rating, you will be well on your way to securing a home loan and eventually having a home you can call your own.
Author: CSI Property Group