Thinking about buying a home? You’ll need to know how much you can borrow and whether this will be enough for you to buy the home you want.
Lenders such as IBA will generally take a mortgage over your property to secure the loan.
Before a lender agrees to loan you money, they will complete a property valuation to determine that the value of the property is adequate. This information will also be useful for you in ensuring that the purchase price is reasonable.
Before taking up a home loan with any lender, you should seek professional financial and legal advice.
Choosing a lender
Before you choose a lender, you should research the available home loan products and options.
Lenders publish information on the loans they offer and the interest rates, fees and charges that may apply. In addition to interest rates, lenders may offer other features of the loan which may suit your personal circumstances, for example, redraw facilities, saving offset accounts and no-fee accounts. IBA does not offer features, such as redraw facilities and offset accounts.
Once you understand the options available, you should contact prospective lenders to obtain more personalised information on loan products suitable for your needs. Alternatively, a mortgage broker may be able to provide information about the loans available from a number of different lenders.
Some of the topics lenders will cover when assessing your loan application include:
Capacity: Can you afford to repay a loan? How much do you currently pay in rent or other accommodation? Do you have a regular savings history? Do you have a steady, reliable source of income and a steady employment history? What are your living expenses, and do you currently live within your income? Are you able to meet the proposed loan repayments over the term of the loan?
Character: Are you a good financial risk? Do you have other existing debts (for example, credit cards or loans)? What is your credit history – do you have a good history of repaying and managing those debts?
Collateral: Does the property you are buying provide enough security against the money you would be borrowing?
Capital: What other assets do you already own?
When you apply for a loan, lenders such as IBA will assess your credit history.