A home loan is necessary for people who are looking to buy property. It makes payments easier, as it splits up the sum of the cost into easy payments. Although most lenders will charge a small interest rate, as long as you keep up on your payments, you shouldn’t have any problem. If you’re looking to get borrow some money for a house, here are a few tips that should help:
How’s your credit?
Like it or not, your credit score will determine how much you can borrow from the lender. In fact, most will even take your history into consideration when they’re calculating your interest rate. If your credit isn’t the best, chances are you’ll only get a fraction of what you’re looking to borrow – with a high-interest rate. This ensures that the bank won’t take a loss if ever you’re unable to pay.
If this case is applicable to you, it’s best to look into improving your credit score first. There are some establishments that can help you raise your rating. This can improve your chances of getting a loan with a good interest. Start sorting out your other debts now, and make sure you’re on top of every payment.
How much can you pay upfront?
Lenders are more likely to give favourable loans to people with a higher deposit. This is because they have some collateral just in case you miss a payment. At the minimum, you should have at least 10% to 15% of the loan as a deposit. However, if you can, go as much as 20% to get better interest rates.
Opal Finance can help you get a home loan. Contact the team today!
Know how much you can afford.
It’s impossible to know if a loan is a good deal or not if you have no idea what you can afford. Add up all your monthly expenses and subtract it from your total income. You should have at least 10% left in savings after you take out the cost of the monthly payments. To be sure, it’s always best to consult a professional. They can give valuable advice on how to sort out your finances.