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7 Steps for Obtaining a Better Mortgage

Mortgages are the base of home ownership in Australia, especially if we are entering the real estate market. Whether it is a first home or an investment property, if we are able to understand common mortgage features and steps then it will help us compare the available options and control our future finances.

Upon entering the mortgage process, there will be a number of forms and an assortment of paperwork which can confuse us. This can make the process of obtaining a good mortgage seem complicated because of the number of people and procedures involved. All this can appear overwhelming at times, and so it is important to recognize that each person whom we work with provides a specific service that will help us become a homeowner

Obtaining a good mortgage has a number of important steps involved which assist in making the dream of home ownership a reality. Here is a 7-step guide for obtaining a better mortgage when buying a new home.


Like all other things, when choosing a mortgage that would be best suited for us, we will find different products available in the market. Hence, it’s important to research all the available options before deciding the type of mortgage that would fit our requirements.

Once we are able to understand the exact features about our mortgage, we can then determine exactly what we don’t need and what we do. Let us ask ourselves, “Does our loan have features that are of no use?” You might have a chance to switch to a cheaper loan with fewer options or benefit from another loan which has more features, such as an offset account.

Know your mortgage

Taking a mortgage is a big step and that is why it is good to know all about it. Furthermore, the better we understand and know about our mortgage, the better we can determine the features which are important and those that we currently have but could live without.

Compare lender interest rates

Did you know? 60% of Australian mortgage holders do not know the interest rate they are paying on their mortgage. Yet, interest rates top the list of reasons why borrowers switch lenders. Interest rates were also the foremost reason that made mortgage borrowers consider moving from a variable to a fixed rate. About three- fourth Australian mortgage holders said they would switch, or consider switching to a fixed rate, especially if they were offered a rate of 0.50% (annually) lower than they currently pay. Understand what interest rates are being offered by Australia’s lenders at the moment and then compare and contrast them against what else is on the market. Your perfect lender should be very competitive when it comes to interest rates.

Other Associated fees

Many lenders will charge various fees, so we must ensure that the lender whom we are contemplating partnering with, offers competitive fees and charges. It is best to get our mortgage broker to compare how a lender stacks-up in terms of the fees and charges on the loan.

Make sure documents are correct

When choosing a mortgage, we should always keep in mind never to falsify information or sign documents that you know to be false or allow anyone offering to do so. When applying for a mortgage, ensure that all our documents are complete. Here are some other things to keep in mind-

  • Do not agree to sign on documents that have incorrect dates or blank fields.
  • Stay away of professionals who tell you that they would fix things later or fill your details later after you have signed on documents.
  • Stay aware of scam credit counseling and credit consolidation agencies. Get all the facts before deciding to combine credit card or other debts into a mortgage loan.

It is best to be associated with legitimate credit counselors. If we are not sure, it is best not to sign. Get advice first from a reputable consumer credit counseling agency.

Submit a thorough application

We should provide our lender with all the necessary documentation needed to quickly and accurately process our application. The mortgage form itself is fairly simple to fill out, and your lender will be able to do most of it. However, we will have to hand over the right papers, so we should gather all documents like tax returns, pay stubs, bank statements, and real estate contracts.

Have your credit report ready

Lenders use our credit score as one of the major factors in determining if we will get approved for a loan, as well as what kind of interest rates we qualify for. That is why it’s important to review our report at least once a year to ensure that everything is in order. If there are any errors that affect our credit score, we could be missing out on important points here and there that will make a huge difference when we walk into a loan office. There might be an instance when interest rates could skyrocket, or you could even be denied a loan if your score is lacking.

If possible, we should try getting a credit report at least six months prior to applying for a loan. This way we will have time to review the credit report and get in touch with a credit agency if any errors are found. We can also use this time to spruce up our score by avoiding big purchases that can put our finances in jeopardy and not opening up any more lines of credit.

Over to you

Taking out a mortgage is likely one of the biggest financial commitments that we will ever make, which is why it is vital to find the best deal that we can. There’s plenty that we can do to improve our chances of getting one of the best mortgages in the market. However, the 7 steps given above will ensure that you get the mortgage you want and is suitable for your needs.

Happy home buying to you