In the initial stages of the home loan process, people often ask us questions such as which home loan do I qualify for? How do you even get one? And How do I know what I can afford? Therefore, we have taken the liberty to answer these and more questions below in one simple blog post. Enjoy!
What Home Loan Do I Qualify For?
To work out what home loan you qualify for, you need to consider several factors. The most important ones being:
- Income and job stability e.g. are you self-employed or work full-time, part-time or casually?
- Other additional income you may have. Could include things like rental income, 2nd job, government benefits (Some are acceptable, others are not).
- Credit history – Any defaults, missed repayments or bankruptcy?
- Do you have any other debts?
- What size deposit do you have?
These factors will all be taken into account by your home loan provider. The size and duration of the loan will be calculated according to the answers to these questions.
How Do I Get A Home Loan?
To get a home loan, you’ll need to either apply to a bank or speak with a really awesome broker (like us). Various criteria will have to be met, depending on the institute in question. Most lenders will require you to have a deposit of a percentage of the loan you wish to borrow ready and waiting. If you don’t have a deposit, there are a number of other ways you can achieve this, e.g. gift from parents, sale of an asset, first home buyers grant.
Home Loans For The Self Employed
More and more people these days are self-employed. So, how do they get a home loan without a stable job and the related documentation? There are a few loan products specifically designed for self-employed people, and take into consideration that often your income is not as consistent as an employee.
Having a stable income that’s reflected in your bank account is key to this. You’ll need to be able to prove what you earned in your past income, as well as be able to provide a cash flow forecast for the next few years. A good credit score is also imperative. Don’t know your credit score? You can get a copy of yours from GET MY CREDIT SCORE for free.
Does My Occupation Affect My Home Loan?
Many people think that a doctor is more likely to get a home loan than a teacher. This is simply not true. Your success in being granted a home loan is based on your credit score, income and deposit size – amongst many other factors. A teacher may not earn as much as a doctor; as a result, they might apply for a smaller home loan. However, the actual occupation will not negatively affect the outcome. What will affect it is the status of your employment, e.g. full-time, part-time or casual. If we use casual as an example, the nature of the hours you work tends to vary week to week, so banks will only consider 80% of a casual workers income, to account for the fluctuations.
For more information on securing the right home loan for your needs contact Blackbox finance by submitting an enquiry in the contact us section below, calling 1300 70 12 17 or sending an email to [email protected]. Blackbox Finance your trusted mortgage brokers servicing Palm Beach, Currumbin, Burleigh Heads and other Southern Gold Coast areas.
If you would like to know more about how to unlock some of the equity (money) from your property get in contact and we will run through your numbers and see what’s possible. You may be surprised how close you could be achieving your dreams.