Do you know what first home buyers are afraid of?
In the latest research of Finder, it found out that first home buyers are just as terrified of bad neighbours as they are of not qualifying for a loan.
In fact, from the 1,001 first home buyers surveyed in Australia, more than one-third of buyers (35%) are afraid of having bad neighbours.
Mr Richard Whitten, home loans expert at Finder shared his insights:
“Having nice neighbours is a common want for Australians but can often be the luck of the draw.
A friendly and safe neighbourhood goes hand in hand, which is a priority for more than a quarter of first home buyers.”
Results are similar to the fear of loan rejection
The results are a close comparison to the 36% who fear being rejected for a loan.
Mr Whitten said:
"Applying for a home loan can be nerve-racking, but there are things you can do to increase your odds of approval.
Your lender will look at your financial statements and spending behaviour, so it’s a good idea to avoid splurging too much in the months leading up to your application.
If you don’t already have a budget, now is a great time to start. Plus, finding areas where you can save will give you more of a buffer when it comes to making your loan repayments.”
He also said it's a smart idea to check your credit score:
“This is what your lender will look at to assess whether you’re a good borrower, and it can also impact what interest rate you get.
You can check your credit ahead of time.
You might even find mistakes in your report, which you should rectify before applying.”
Other interesting findings from the research
- The research found buying in the wrong location is another top first-home buyer fear (34%).
- Younger buyers are more concerned about the lack of flexibility that comes with owning a home.
- Nearly a third of Gen Z (31%) and Millennials (30%) fear committing to staying in the same property or area for an extended period, compared to 20% of Gen X.
Tips to get mortgage pre-approval
1. Compare mortgages and find a suitable lender
Home loan pre-approval lets you shop for property confidently because it gives you the "green light" from a lender that – provided your situation doesn't change – you're likely to be approved for a home loan.
2. Work out a budget
Get a rough idea of how much you can afford to borrow based on your income, expenses and deposit size.
Pre-approval gives you a better idea of how much a lender is willing to lend you, and it's also handy if you're buying a property at auction because it gives you a firm upper limit to your bidding.
It’s also a good idea to check your credit score – this is what your lender will look at to assess whether you’re a good borrower.
3. Gather your documents
Organise your mortgage documents to prove your identity, income and employment.
4. Complete the lender's approval process
Keep in mind lenders will issue you a pre-approval that lasts 3 months.
This gives you time to hunt for properties and get your actual application together.
The expiry date is usually listed on your pre-approval letter, and once this date lands, you'll need to apply for pre-approval again.
