Tackling Mortgage Issues Part 1

Buying a new home is very exciting but there is a lot of work that needs to be done to ensure that everything is done right. Many Australians are taking advantage of the First Home Owners Grant, and that is a good thing. But there are a few things about mortgages that all Australians should be made aware of to ensure that their home buying experience goes as smoothly as possible.

Bad Credit Does Hurt

Every time you are late on a payment or miss a payment altogether it is recorded in your credit history. If you have bad credit it really can hurt you when you go to get a mortgage to buy a new home. It may mean that you are not able to get a loan, or that you have to pay higher percentages on the loan. Have a look at your credit history before you go in to get a mortgage. It is best if you know what is on there and avoid any unexpected, and unwanted surprises. It is also a good idea to check your credit history to ensure that it is accurate. Sometimes things get put on to hurt your credit score that are not your fault, or is entirely untrue. A good rule of thumb is to check your credit at least once a year, or every six months.

Assets Are Not Income

When it comes to getting a mortgage loan, the lending companies are only concerned with if you can repay the money back. They don’t care if you have a valuable collection of rare coins worth thousands of dollars. Unless you plan on selling those coins to repay your mortgage it is of no value at all to them. How much money you make, and not how much stuff you have accumulated that is worth money, will determine how much money you can borrow to buy a new home.

In the next installment we will continue to look at different mortgage issues.

Sean Rasmussen
Property Options Australia
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