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Home Loan Advice

Name: Home Loan Advice
Creator: Savvy
Published: 2021-06-17T09:52:01+09:30

Prepare yourself for buying a home with important loan advice found through Savvy's handy guide.

No obligation. It won't affect your credit score.

Written by , updated on August 8th, 2023

If you’re looking to move into the property market, the first key step to nail is your research. Thoroughness is the aim of the game, so going to the right place for home loan advice is a crucial decision to make. We’ll look at where you might want to go in this comprehensive guide to home loan advice providers.

Who should I go to for home loan and property advice?

There are a wide range of resources on offer when searching for advice and information on the home loan application process. Here are, in no particular order, some of the primary options you might look to take when trying to find quality home loan advice.

Comparison sites

Savvy, a financial comparison site, can give you a greater insight into the types of lenders and loans you should be looking to apply for. While you may not gain any specific insight into how financial decisions like these might affect you from a comparison site on its own, you can narrow down your list of potential lenders by assessing their loan conditions and criteria against one another. This may include aspects such as home loan interest rates, fees and additional features.

You can also calculate each lender’s monthly repayments according to their interest and comparison rates, which can help you gain an understanding of the sort of loan size and rate you can feasibly afford to pay back. Overall, Savvy can give you more clarity on the bigger picture of which lenders you should look to go with for your home loan.

Mortgage broker

A mortgage broker is another useful place to go when determining your suitability as a home loan applicant and which lender to choose. They're specialists in all things mortgages, so they’ll be able to find home loans that best suit your situation. They can also help you maximise your chances of gaining approval for your home loan application, guiding you through the process with useful advice.

It is important to note, however, that despite the fact that many mortgage brokers won’t charge you for their services, they’ll likely be paid via a commission from the lender they refer you to for your home loan. While the best mortgage brokers will only act in your best interests, you should always ensure you have as much say as possible when your broker presents you with home loan options.

Financial planners

A financial planner is another handy option for helping to get your finances under control and ready for a tilt at a home loan application. Planners are qualified to give you advice on your current financial position and which options, if any, your situation would be most suited to. If you’re struggling to save for a deposit, it’s also a great idea to discuss your situation with a financial planner. They can help you create a saving plan that’ll make it easier to reach your home loan deposit goals. However, they can be costly.

Accountants

Visiting an accountant is an important step in analysing your financial situation and working out if taking out a home loan is a viable option for you at this stage of your life. Your accountant can sit down with you and take into account income streams, employment situation, assets, debts and any other financial aspects that could affect your application.

They’ll be able to help you streamline finances and consolidate liabilities so that you have the best chance of success with your home loan application. In addition to this, an accountant will be able to help out with tax matters such as capital gains tax and negative gearing.

Real estate agents

When it comes to researching properties and areas, it can pay dividends to contact a local real estate for some first-hand information. They’ll be better placed than anyone to give you a rundown of the types of properties available, pricing and what buyers are generally looking for. Knowing about the type of property you want to buy will come in handy when you have to provide that information to your lender.

Real estate agency websites, as well as property sale sites, will also offer a snapshot of the properties available. Listing prices can give you an idea of how much you might need to borrow, though these prices are subject to substantial change in line with market movement and varying demand.

Your current bank or credit union

If you don’t know where else to start for advice, you can always head to your bank or credit union to have your finances assessed. Meeting with your financial institution can give you a greater understanding of the requirements of a home loan application and how these may apply to you when it comes time to submit yours. A discussion with your institution about the logistics of pursuing a home loan won’t lock you into negotiations with them; you’re under no obligation to choose to go with them when it comes time to decide on a lender.

Government resources

Australia’s federal and state governments provide a bevy of online resources for the prospective homeowner looking for advice on home loans. Websites like www.moneysmart.gov.au offer a range of handy home loan advice, addressing topics such as a home loan deposits, interest rates, additional fees and more. They have a mortgage calculator and a range of articles on other home loan advice topics. On the whole, government advice is useful and very accessible, but will always be more general in nature.

Advice provider	Why you should use them
Comparison site	Provides services that allow you to compare top loans and work out how much each option will cost in the long run.
Mortgage broker	Serves as a direct line of contact between you and the lender, allowing them to identify the top home loan deals for you.
Financial planner	Helps you set financial goals to meet that can allow you to realise your home loan dreams.
Accountant	Analyses your finances and determines your home loan options, identifying areas you can improve before applying.
Real estate agent	Can provide accurate advice about house prices and what buyers tend to look for when searching for a home.
Current financial institution	Gives some direct insight into what you’ll need to know when applying for a home loan, such as eligibility criteria and policies on fees.
Government resources	Can be a useful service to build a base knowledge of the home loan process and provides helpful general information that can aid potential borrowers.

What advice can I get on improving my chances of a successful home loan application?

Perhaps the most important element of the home loan application process to get right is to ensure that your finances and credit score are as strong as possible. Lenders look to your credit score as a tangible and accurate indication of your reliability as a borrower, as the number is primarily based on your ability to pay back the amount of money you’ve borrowed in the past. As such, you’re able to improve your credit rating ahead of your home loan application by paying off any existing debts or cutting down on expenses bought with credit. Lowering the limits on your credit cards is an effective way of reducing your credit spending.

Other areas you can fine tune before you apply include saving up as much as you can, not switching jobs or industries within a year of your application and minimise the amount of lenders you apply to. The latter two of these could derail your application, as returning to a probation period will reduce a lender’s confidence in your ability to repay the debt and every home loan application will show up on your credit report.

Any other home loan advice questions?

Should I ask a parent or friend for home loan advice?

Yes – for more general guidance on their experience of dealing with a home loan. This can actually be a great way to prepare yourself for the sort of commitment you’ll be entering into. However, family and friends (usually) aren’t qualified to give you more substantive advice about your financial situation, so you shouldn’t treat their words as gospel.

Where should I look for mortgage advice if I’m a first-time buyer?

Any of the home loan advice providers listed above are very useful for first homebuyers looking to enter the property market. If you’re in this position, you should also look into whether your state government has any grants available to you, such as the First Home Buyer or HomeBuilder Grants, that could help shoulder the financial burden.

How do I find advice on how much I should borrow for my home loan?

The good news is that you can actually do this yourself. There are online calculators like this one that can tell you what sort of repayment commitment you’ll be taking on under different loan conditions (e.g., interest rates and fees). Alternatively, a mortgage broker will help you determine the kind of home loan repayments you’ll be able to manage with your income.

Is there any advice on what type of home loan is best for me?

Yes – there are a number of different home loan types on offer, with benefits and drawbacks that may suit you more than others.

Variable rate home loans leave their interest rates open to market fluctuation, which opens borrowers up to both peaks and troughs, and are the most flexible option on offer when it comes to making additional repayments.

Fixed rate home loans provide borrowers with the security of knowing how much they’ll be paying in interest and allow for more accurate budgeting, but they’re rigid in their pay structures and can be hard to get out of before their end date without paying a significant fee.

Split rate home loans allow you to fix a portion of the home loan at a certain interest rate while leaving the rest variable. You can decide what percentage split between fixed and variable to go with, but bear in mind that splitting your loan in two means you’re paying interest and fees on both.

What’s the best place to find advice about refinancing my mortgage or buying an investment property?

The above options for home loan advice also apply for investment properties, especially accountants and financial planners who can assess how viable an investment property is for you. Savvy is also useful to keep you up to date on current home loans and providing comparison points between lenders.

Who can I go to for advice if I’m struggling with my home loan repayments?

If you find yourself in over your head with expenses, you’ll be able to consult with a free financial counsellor who can give you important advice on how to overcome financial hardship. Their job is designed to extend a hand to those who need help with their finances, particularly in the face of repaying a home loan.