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Get Finance Ready Before Getting Finance Approval

Preparing to purchase a property for your home, investment or business premises takes time. Additionally, having the right guidance when it comes to collecting your documents of identification, evidence of savings, and capacity to repay a loan for an application, is only part of the purchasing process.

As a lawyer I process the contract of sale, so I was interested to learn when I sat down with friend and property lending expert Carla Richardson from Wyze Finance, just how much work goes into preparing for the purchase of a family home, first unit, or investment property.

Each of the aforementioned purchase situations have a unique set of circumstances and vary in requirements to satisfy loan approval, and that’s why seeking the right advice from the right people at the right time can make the purchase proceed without disruption.

Carla, an experienced mortgage broker and authorised Australian Credit Licencee, shares the considerations both she and her clients have to address when applying for a loan.

You can listen to our full discussion here.

Her expertise and knowledge within the lending industry enables her clients to feel confident when it comes to negotiating the terms, conditions and loan requirements. With house prices continuing to rise across Australia, the heartbreak of missing out on a property because finance wasn’t approved can also be a costly exercise if purchasing under auction conditions.

“I’m committed to getting the best product for my clients, as everyone is at different stages of their life that impact on the lifestyle and financial resources of individuals and couples” says Carla.

As an independent broker, Wyze Finance is not committed to any particular bank or lender and sifts through hundreds of banks to find the right one for each client. The job of a broker is to help you work through the loan criteria and find one that is both suitable and affordable.

Buying a Property Is Considered One of the Largest Investments You Will Ever Make.

Carla helps people understand the four-step process to preparing an application to ensure they have the right approval, so that settlement goes through on time, without delay, or disruption.

Carla shared with me how important it is to demonstrate to the lender that you are able to save, repay the loan, and have at least 3-6 months of evidence that you can meet your budget, thereby demonstrating you have the financial capacity to meet your repayments. Here’s a brief summary:

Are You Credit Fit?

  • Gather information regarding income, savings and expenses;
  • Identify your Credit Rating as well as totaling your Credit Liability;
  • Obtain a Property Valuation and Inspection of Property Report;
  • Determine the Loan Ratio and apply for insurance if needed.

The Loan Application to a Lender can be a daunting process, yet, with an expert like Carla ensuring the relevant documents and information is included, you will be one step closer to buying your home.

Some property terms you may come across:

Pre Approval

This is the lender issued conditional approval of a loan for the property you intend to, or end up buying.

Auction

The sale of a home under auction conditions. You must register as a buyer and anything purchased on the day by a bidder (during or after the auction) waives the cooling off period.

Private Treaty

This is when the property is purchased by negotiation with the purchaser subject to conditions of the contract of the sale.

“My best advice to those looking to buy a property; speak to a bank or mortgage broker and discuss what you can potentially spend. Look at your savings and spending habits, adjust lines of credit or pay off other loans that may reduce your capacity to borrow.”

Carla Richardson

Takeaways

  • Get income streams, savings and budget in order;
  • Speak to a professional and get guidance;
  • Make an application when you are finance ready.

You can hear more about this process, some potential issues that might arise, and how to navigate the lending industry on The Curious Lawyer podcast here.

You can also contact Carla Richardson by emailing her here info@wyzefinance.com.au or calling her on 02 9542 5066.

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