With the media talking about the upcoming Adelaide version of Monopoly, it got me wondering about how the rest of us get funding for buying property when we don’t have a rich Uncle Pennybags.
In our conveyancing practice, we have noticed that one of the most common methods for getting finance is the use of mortgage brokers.
If this is an option you will be choosing in your plans to buy a house – or hotel – in South Australia, here are some tips in preparing for your meeting.
What to expect in your first meeting with a mortgage broker
Part of the attraction of choosing a mortgage broker is the range of financial institutions they have connections with.
In your first meeting, which will take about an hour, you will be keen to find out if you can or cannot borrow and if you can, how much.
Your broker will be keen to discover whether you qualify for any of their products to ensure they can get a sale.
Most brokers do not charge for their services. Instead they earn commission from loans they sell.
You will find that the first meeting will involve gauging your financial status and giving you an indication of how much you might be able to borrow, if at all.
It is prudent to have these meetings well before you start looking for property to buy so that your finance can be in place before you start looking or enter into contracts to buy.
This will put you in a stronger position during negotiations with sellers, and lessen the chance of mishaps or delays in the conveyancing process when your sale goes through.
What your mortgage broker will want to know
Some key information will help you get the best information from your meeting with a mortgage broker, including:
Identification: A driver’s licence or passport, or other documents to reach the 100 points check used commonly by banks.
Address details: Your residential address history for approximately five years. If you are renting, some will want the name and contact details of landlords or the Managing Agent.
Income: Your employment history for the previous five years along with earnings such as wages/salaries (group certificates and/or payslips), overtime, and any other income sources. If you’re self-employed, your two previous business and personal tax returns will be the minimum required.
Assets: Lists of savings accounts and balances for the previous six months, value of assets within the home, including your vehicle(s).
Liabilities: Lists of credit cards (current balances and credit limits) and other loans.
That is a general guideline and there might be other information needed.
For example, if you are building a property, you will need quotes from your builder and council approvals, if you are refinancing a property, you will need a copy of the Council rates and Building Insurance, and if you have already negotiated to purchase a property, you will need a copy of the purchase Contract.
As with all things in the world of property, the devil is often in the detail, so having your Conveyancer relationship already established will give you a sounding board and trusted advisor through the process.
The next move is yours.