Get Ready To Buy Your Dream Home; he is a helpful “5-Point Mortgage Approval Checklist,” written by a mortgage specialist.

Get Ready To Buy Your Dream Home.

5-Point Check List from a Mortgage Broker to help you get ready to buy a property.

The latest economic data indicates that Interest rates are anticipated to decrease as we approach the end of 2024, presenting a favourable opportunity for prospective homebuyers. The upcoming Spring and Summer seasons could be the ideal time to turn your homeownership dreams into reality. Now is the time to take proactive steps by engaging with your mortgage broker early to guarantee your readiness. By seeking clarity on essential matters and addressing any concerns promptly, you can establish a solid groundwork for a seamless home-buying experience.

Here is my “5-point Mortage Approval Checklist” for you to consider;

1. What available equity or savings do I have that I can allocate to the purchase?

2. Is my AU tax up to date? (if you already have an investment property in Australia)

3. Are all of your credit facilities up to date? (in AU and overseas - mortgages, loans, credit cards etc)

4. On a monthly basis, how much of my overseas income am I comfortable allocating to the property/loan?

5. Once you have a pre-approval in place, how are you going to transact? eg find the property, inspect it, negotiate a contract etc?

1.What available equity or savings do I have that I can allocate to the purchase?

Firstly, review any existing equity in assets such as property or investments that could be leveraged. Evaluate the current market value of these assets and calculate the potential equity that could be utilised.

Secondly, delve into savings accounts, fixed deposits, or other liquid assets that could be redirected towards the purchase. Ensure to distinguish between short-term savings for emergencies and those that can be invested. Now is the time to eat in, cook at home, and reduce your spending so you have as much in your savings accounts as possible and have created a “buffer” of 3-6 months’ worth of your expenses.

2. Is my AU tax up to date? (if you already have an investment property in Australia)

To determine if your Australian tax obligations are current, you may need to assess various factors related to your investment property. Reviewing your rental income, expenses, depreciation claims, capital gains, and any applicable deductions can help ensure compliance with Australian tax laws. For precise guidance and assurance regarding your AU tax status, consulting with a tax professional or accountant specializing in Australian taxation is recommended. You will need to seek advice from two different licenced providers;

1. Personal Taxation Specialist (Annual Tax Return)

2. Depreciation Taxation Specialist. (Depreciation Schedule).

3. Are all of your credit facilities up to date? (in AU and overseas - mortgages, loans, credit cards etc)

It is essential to check that all your credit facilities are up to date, both in Australia and overseas. This includes mortgages, loans, credit cards, and any other financial commitments you may have. It is crucial to ensure all payments are made on time to maintain a good credit standing and avoid any negative impacts on your credit rating. It is best practice to pay off any outstanding debt like student and car loans, reduce your limits, and cancel unused credit cards or lower credit limits.

4. On a monthly basis, how much of my overseas income am I comfortable allocating to the property/loan?

When considering allocating a portion of your overseas income towards your property or loan, the decision often depends on various factors such as your overall budget, financial goals, and lifestyle preferences. A common guideline is to aim for a housing-cost-to-income ratio of around 25% to 30%, ensuring that you can comfortably cover other expenses and save for the future. However, this percentage can vary based on individual circumstances and priorities.

It is essential to evaluate your complete financial picture, including other financial obligations, savings targets, and long-term financial goals when determining the amount to allocate towards your property or loan each month. By creating a detailed budget and considering your comfort level with different scenarios, you can make an informed decision that aligns with your financial objectives.

5 . Once you have a pre-approval in place, how are you going to transact? eg find the property, inspect it, negotiate a contract etc?

Once you have a pre-approval in place for a mortgage, finding and purchasing a property typically involves several key steps. Firstly, you would need to start searching for properties that meet your criteria - this can be done through online listings and real estate agents by attending open houses, or if you cannot view the property, you can engage with a buyer agent to help facilitate the purchase.

Once you've identified a property of interest, you must see if it sells at auction or is for sale. Each state has different rules about how the negotiation takes place; take the time to review the purchasing guidelines. Staying organised and contacting your mortgage broker, solicitor, buyer agent, and real estate agent is important throughout the transaction process.

If you have any questions regarding your current situation and your future goals, please don’t hesitate to contact Adam Kingston from Australian Expatriate Finance.

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