Quick Mortgage Q&A - Mortgage Conditioning
In our video series Quick Mortgage Q&A's, we answer some of the most commonly asked questions that we get asked as mortgage brokers. Today we are discussing mortgage conditioning - what exactly is it, and when should you start getting your finances in order in preparation to buy your first home?
I'm wanting to buy my first home but don't know where to start. What is your advice?
That's something we get asked quite often and many people also ask when is the right time to start talking to a mortgage advisor? The truth is, right now is the perfect time. Come and see us as soon as possible and we can start to understand your current financial position, as well as what the banks requirements are for a mortgage and how we can get you in the best position to buy. That could be right away, or we might need to work on a plan to get you ready to buy in the future.
I've heard the term "mortgage conditioning" but what does it actually mean?
It's part of what we talk about when getting ready for a mortgage. It's understanding your financial position, so that is your income and what kind of deposit you have. That deposit might involve family support through gifts or deeds of debt, or maybe even a joint purchase. We are also looking at your existing debt position. So do you have unsecured debt or credit card debt, etc. There is quite a bit that goes into it to get a full understanding of where you are at from a financial point of view and how that looks from a banks point of view also.
We also need to take into account if you are looking to buy an existing property or if you are thinking about a land and build, how does your account conduct look, etc. All of these are things we take into account and we can start to understand where you are at from a financial point of view, and from we then can get you ready to get the best mortgage.
I have personal loans and credit card debt. How will this effect my ability to borrow?
Any unsecured debts you have may have an impact on how the bank views you for a mortgage, so we would definitely need to have a look at those. It could be consolidating debts is the way to go, and we could certainly look at reviewing credit card limits. We just want to make sure you are in the best possible position to get that mortgage.
Any questions? Get in touch with us today!