A “home loan” or “mortgage” is a loan advanced to you by a financial institution, in return for security over the property you are using the loan to buy. Typically a mortgage will be a 25 or 30 year term, with regular repayment amounts fortnightly or monthly that are designed to pay off the loan over the contracted term.
The loan is secured against your property. So if you are unable to continue paying the loan, the lender may ultimately require you to sell the property to settle the debt.
Given property prices in Australia, a home loan is realistically the way by which the majority of people will afford to buy a house.
What banks want to see to approve your home loan
🏠 Capacity, this refers to your income and current expenses. Banks want to make sure you are able to afford the loan on your current income. At FinanceOK we have access to all of the lenders borrowing power calculators. This makes sure we go with a lender that can lend the amount you are after.
🏠 Credit history and credit score.
🏠 Deposit or Equity. Most lenders require a minimum 5% deposit plus fees. However we do have access to a few lenders that can help if you have 0% deposit.