About one third of Australians own, or are buying, their own property.
Most mortgages are arranged directly with the Banks, Building Societies and Credit Unions. A smaller number use the facilities of a Mortgage broker, mainly when their circumstances need some expert assistance.
One of the first questions is:
What Interest rate option is best:
- Variable interest rate.
- Fixed interest rate.
- Line of credit.
Next
How much can you borrow?
Two variable are taken into account here, the first being:
Property Value
- 80% of the bank valuation is a common maximum, although this can be increased, but normally with a premium charged for Mortgage Insurance (this covers the lender, NOT you)
- 106% of the bank valuation has been available in the past, and will no doubt be available gain in the future, when the GFC is long forgotten.
Borrowers Income
All lenders will consider your ability to repay, when calculating how much they will lend. This is not done in a simple way of x times income, as I recall when I was younger, but in a more complex way to determine how much spare money you have left after normal living expenses.
Your credit card limits are also taken into account when applying, so it is often best to close all credit cards when applying, and get a new card with the lender, which they will normally offer you anyway.
Mortgage Calculators
The above are a selection only, and most banks will have similar on their websites.
