Getting a mortgage is something the majority of people will go through at some stage in their life. It is a significant investment so you need to ensure that you choose the best option for you and look at all of the different available options.
To qualify for a mortgage, you do not need to just worry about your credit score; there are a number of different factors that go into whether or not the lender will give you a mortgage and how much they will decide to lend you. Your goal is to get the best bang for your buck, paying the less amount of interest as possible on the debt.
Depending on what factors are influencing the lenders decision, even the difference of a couple of points in the interest rate can make a significant difference over the length of the mortgage period. This difference can run to thousands upon thousands in the long run. If you are ever in doubt about a certain mortgage product or terms, you should utilise the services of the folks at mortgagebroker247.com.au. Here is some additional advice that will help you to navigate through the process.
One of the key tenets that mortgage lenders look at is your credit score. This is made up of your history in relation to the repayment of debt. It shows the lender how reliable you will be when making your monthly mortgage repayments. If they deem that there is a significant risk of you not being able to meet the full repayment son a monthly basis, they may refuse to give you a mortgage.
If your score is acceptable, but still not great, they will charge you a higher interest rate in order to compensate for the increased risk of not meeting repayments. When you are getting ready to apply for a mortgage, you should ensure that your credit standings are in good order. This means ensuring that all repayments for things like cars and student debt have been kept up to date and on time.
Stability of income and employment
One of the major factors that mortgage lenders look at is your job stability. If someone works for an established company, in a profitable industry, they are a lot less likely to lose their job as a result of an unforeseen economic or other type of disaster. Whereas on the other hand, the self-employed or those who work in a more volatile environment will have less stability, with their monthly income levels swaying up and down on a monthly basis.
If you have a record of long periods of sporadic or no work, this will not look favourably on your application. Normally the lender will look at your tax returns for the past two years in order to calculate your monthly average income and determine the level of risk associated with you and your mortgage would be. This is why it is important to not be constantly switching companies or jobs if you are looking to apply for a mortgage.