How do you apply for a mortgage to buy a house in Sydney?

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  • How do you apply for a mortgage to buy a house in Sydney?


Answer #1 | 23/08 2013 07:24
It is important that you find out what your borrowing capacity is before you go searching for a property. There is no point looking at anything until you know how much you can (or can't) afford. Start by doing a budget to ascertain how much you can afford in repayments. A budget involves you listing ALL your expenses on a weekly, monthly & yearly basis from groceries to car insurance & car rego to a annual magazine subscription. The amount that the bank says it will lend you may involve repayments that are greater than the amount you can afford. Be honest when doing your budget (don't leave anything out & don't cut yourself short ...allow a bit for a rainy day because the unexpected can hurt financially if you don't allow some room for the unexpected when doing your budget!) Once you have ascertained what you earn verses what your expenses are you can get an idea of what you might possibly be able to borrow. It is not about whether you work full-time or part-time ... it is about consistency (how long you have been in the job for & how likely it is that you will still have a job in the future) input & output (ie money coming in verses money going out) & your credit rating - if you owe money on credit cards, car repayments etc ensure you pay them off on or before the due date (this shows the bank you are reliable!) SO... once the budget is done... time to go to the bank (or building society... you don't have to use a bank ... eg just as an example ~ you can go to Commonwealth Bank or RAMS home loans. They will let you know what you might be able to borrow & will provide you with a conditional loan approval (letter telling you how much you can borrow from them based on what you have said you earn & what you are able to repay). Once you have found something you are interested in purchasing you should ask the real estate agent for a copy of the contract of sale - take this to a solicitor or conveyancer to get them to check if there is anything in the sale that you should be aware of. When you buy a property the standard deposit is 10% of the purchase price (this is 10% you need to produce yourself ... the bank doesn't lend you ALL of the money) - eg the current median house price in Sydney is around $700,000. A 10% deposit would therefore be around $70,000. In some instances you might+++ be able to get a 95% loan (meaning you only have to come up with 5% of the deposit yourself) but I wouldn't hold your breathe on that one!‎

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