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Things to consider before Renovating

Things to consider before Renovating

The decision to renovate is a common sticking point for homeowners, who can spend hours weighing up the cost benefits. 

Whether your motivation is to add value to your property or to add a touch of your personality to the home, renovations are expensive and debt often follows.

By working with a mortgage broker you will be able to find solutions that benefit your long-term goal, rather than hindering future plans.

While CBM Mortgages can’t assist you with forecasts on future property values, we can help you reassess your current financial position, run through your plans and future payments, and decide if you can afford to take on more debt.

Laying the foundations

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How lenders assess applications

How lenders assess applications

Brokers can help connect you to the lender best suited to your mortgage needs by shopping around on your behalf.

In order to decide whether or not to provide you with a loan, lenders will generally assess you against five qualities.

Your ability to repay the loan. To establish your capacity the lender will look at your employment history and salary to evaluate whether you have enough cash coming in reliably to pay the loan over time.How much cash you have up front. Assessing your ability to put down a percentage of the value of the property being purchase up front is standard. The percentages vary though, while some specialist lenders may approve a five per cent deposit.The property appraisal price. Since the property is used as collateral if you are unable to repay the loan, the lender will value the property. Based on the report, the lender will decide whether the property is worth the loan being approved.Your financial history. Your credit rating, expenses and debts will help the lender assess your character as a borrower and whether you are worth the risk.Market conditions. Economic circumstances in the market can influence what interest rate you have access to and whether you need to provide extra security. They can also influence the repayment schedule.

 The Finance Broker Advantage

While loan officers work solely for a lending institution and can only offer that institutions products, an MFAA Approved Finance Broker is able to shop around for you.

Finance Brokers are paid commissions by lenders to match borrowers to the right products, and can negotiate the lowest rate on your behalf, which is why half of borrowers today turn to finance brokers when it comes to finding a home loan.

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