How a broker guides your way to owning your first home

Are you dreaming of owning your first home but feeling overwhelmed by the financial aspects? You’re not alone. Purchasing a home involves a lot more than just finding the right property. It’s about understanding your financial capacity, costs involved, and securing the best mortgage deal. This is where a mortgage broker can be your invaluable partner.

Let’s explore the four key areas where a broker’s expertise can make your journey to homeownership smoother and more informed.

1. Borrowing capacity

One of the initial steps in buying a home is determining your borrowing capacity, the amount of money a lender is willing to lend you based on your financial situation. A mortgage broker can assess your income, expenses, and credit history to provide a realistic estimate of how much you can borrow. This insight is crucial as it helps you narrow down your property search to options that align with your budget. Brokers have access to various lenders and loan products, giving them the ability to find options that suit your specific financial circumstances. They can advise on strategies to improve your borrowing capacity. For example: did you know that a $5,000 credit limit on credit facilities such as credit cards, Afterpay, and Zippay can reduce your borrowing capacity by almost $30,000, even if it’s paid up? In some loan application scenarios reducing your limits or closing credit facilities can boost your borrowing power. Before you make any changes, talk to your broker. They will be able to let you know if making these changes will help or hinder your loan application.

2. The true cost of purchasing a home

Buying a home involves more costs than just the purchase price. There are government fees, legal costs, stamp duty, and potentially lender fees. Understanding the full spectrum of costs upfront is essential for budgeting and avoiding financial surprises later. A mortgage broker will break down these costs for you, providing a comprehensive overview of what to expect throughout the purchasing process. They can also explain potential additional costs, like mortgage insurance if you have a smaller deposit, so you have a clear picture of the total investment required.

3. Deposit required

Saving for a deposit is often the biggest hurdle for first-time buyers. A mortgage broker can guide you on how much deposit you’ll need based on your desired property price and borrowing capacity. They can explore options like government schemes that assist first home buyers, which might lower your required deposit amount. Brokers can also help you understand the impact of different deposit sizes on your loan terms and interest rates, empowering you to make informed decisions about your financial commitments.

4. Repayment amounts

Once you secure a loan, understanding your ongoing repayment obligations is vital for budgeting and financial planning. Mortgage brokers can compare different loan options and their associated repayment amounts. They’ll consider factors like interest rates, loan terms, and repayment frequencies to provide you with a clear breakdown of what your mortgage repayments will look like over time. Brokers can also offer strategies to minimise your repayments or pay off your loan faster, such as making additional payments or exploring refinancing options as your financial situation evolves.

5. Reviewing credit reports

Your credit history plays a significant role in your ability to secure a mortgage. A mortgage broker can review your credit report to identify any issues or inaccuracies that could affect your borrowing capacity. They can offer advice on improving your credit score if needed, ensuring you’re in the best position to secure a competitive loan.

In summary, a mortgage broker acts as your financial guide through the complexities of purchasing your first home. They provide personalised advice and access to a wide range of lenders and loan products, ultimately helping you make informed decisions that align with your goals and financial capabilities.

If you’re considering buying your first home, reach out to us and start your journey with confidence. Remember, owning a home is not just a dream, it’s an achievable goal with the right support and expertise.