Questions to ask before taking out a home loan
A home loan is a serious long-term commitment that has a significant impact on your finances. That’s why finding the right home loans is so vital. When you're shopping for a mortgage, here are important questions to ask a lender before applying.
How much can I borrow?
Everyone is in a different financial situation. The exact amount depends on your income, expenses, and financial commitments. To get a quick estimate of how much you can borrow, you can use our borrowing power calculator.
If you want to increase your borrowing capacity, there are plenty of ways you can try to improve this, such as improving your credit score, reducing your expenses, and much more.
How much money do I need for a deposit?
The loan-to-value ratio (LVR) available will vary depending on the lender criteria and the financial situation of the borrower. At loans.com.au, we offer home loans up to 90% LVR, which means borrowers only need to put down a 10% deposit, subject to eligibility requirements. However, any deposits lower than 20% may require borrowers to get lender's mortgage insurance (LMI).
What fees do I need to pay?
You may need to pay various upfront fees, such as an application fee, establishment fee, and the like. The amount and types of fees vary per lender. Inquiring about upfront fees can help you add these extra charges to your budget.
In addition to upfront fees, loans usually have ongoing or annual fees, discharge fees, and break costs should you refinance your loan with another lender in the future. These fees affect the total cost of your home loan. If you'd like to save money on your mortgage, it's important to find a lender that offers zero or minimal ongoing fees.
Do your loans offer special features?
Home loans are not one and the same. It's important to ask lenders about features they have available that may help reduce the overall cost of the loan or manage the loan better. Loan features such as an offset sub-account, redraw facility, and unlimited additional repayments can help you lower the overall interest paid and pay off the loan sooner.
At loans.com.au, we offer the Variable Bold Home Loan that includes useful features that can give borrowers more flexibility and minimise cost over their loan term. If you'd like to know more, get in touch with our friendly lending specialists today!
What documents are needed when applying for a home loan?
Generally, lenders will require personal identification, proof of income, bank statements, and tax returns to verify your personal situation, expenses and income.
Ask your lender about the specific documents required when you apply for a loan, as these may vary from lender to lender. Being prepared with your documents can ensure a quicker loan application.
Where can I apply for a home loan?
If you're ready to apply for a home loan, loans.com.au has an easy online application process. All you need to do is fill out the application form, submit the requirements, and our friendly lending specialists will get back to you soon.
You can follow our simple step by step home loan application guide. You can also complete your application via our app onTrack.
Find out in under 2 minutes if you qualify for one of our home loans.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
