This week in Mike Asks, Mike Rooney interviews one of Brisbane top lending advisors Jeremy Heeney from Crowe Horwath, about real estate house and property lending finance, in Queensland. Jeremy offers some valuable advice and tips
Purchasing a family home can be emotive. Know your limit. Speak to your lender early on so that you don’t waste your time looking at unsuitable properties. Be prepared.
Know and understand what the lender requirements are. Documentation required? Do you have enough deposit? Has the deposit been held for 3 months? Should you be looking at family guarantees? Do you meet the Lenders and mortgage insurers employment requirements?
The role of a good lender/Broker is to partner with you on the journey.
Where should a buyer start?
The first step in sourcing finance when looking to buy real estate or property should be your budget. What can you afford to pay per week or per month. Will it be a home you will live in or an investment, and you need to consider factors such as rental income.
How much deposit does a buyer need?
While Deposit is key, the greater the deposit the greater your chances, and the easier the approval process. But it needn’t necessarily be the determining factor. There are a lot of lenders that will advance a higher “Loan to Value Ratios” (LVRs), 95% of the value of the purchase up to 98%, and there are others that 100% with the support of a family member or guarantor.
Should a buyer get pre-approval?
Buying a property is a stressful thing for many people, whilst it’s exciting. Often you’re under a tight timeframe, 14 days or 21 days for finance. Jeremy can’t express the importance enough of getting pre-approval.
To meet with your lending advisor gives you a chance to decide what sort of finance product, being variable rate, fixed rate, or a combination of the two. What type of lender, who the lender may be, what fees are acceptable.
What other advice can you give?
A good lending advisor can empower you to, to be able to negotiate strongly and effectively.
You don’t want to miss a house over $20,000 when that for example that might be as little as only $65 per month extra in actual repayments*
What is a common mistake?
Jeremy finds people often miscalculate. They assume they’re borrowing 95% and therefore that they only need a 5% deposit. The reality is that the 5% can be substantially more when you factor in things like conveyancing, stamp duty, legal fees, transfer fees, building & pest inspections and so on.
So your 5% may be closer to 8% or 10% before you realise.
What can brokers do that banks can’t?
You don’t normally have the time to go to 5 or 6 different banks to find out what the rate is, what the product is, or if you meet the parameters required for those offers.
You can go to an independent broker, such as Jeremy Heeney and he can give you give you that answer across 27 different lenders.
With the spread of interest rates being as much as 1.5%, on an $800,000 home loan that could represent a $12,000 per year difference. That’s $1,000 per month, it’s not insignificant.
Jeremy urges you to speak to a good lending advisor such as himself. He will guide you through the process. Make sure that you are aware of all of your costs, all of your charges, and prepare you for what is one of the biggest decisions you will make in your life, the purchase of a property.
Important things to consider when preparing for your finance are:
- product and lender selection
For more information contact Jeremy Heeney directly on 0437 026 692,
or for Brisbane Real Estate contact Mike Rooney on 0431 646 373