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Buying a home

Questions to ask a mortgage lender

29 March 2022

Purchasing a property is an exciting time, but knowing where to start can be tricky. Speaking to a home loan expert can help you plan your budget and understand every step of the home buying process.

Suncorp Bank Senior Lending Manager Mathew Johnston speaks to a wide range of people about their home financing.

“We see a good mix of people – first home buyers, people looking to either upsize or downsize, and of course those looking to refinance their loans,” says Mathew.

“Regardless of who I’m talking to, all conversations are based on understanding their objectives and how that relates to different loan options.”

To help you make your next move, below are seven useful questions to ask a home loan expert like Mathew. 
 

1. How can I get started towards getting a loan and buying a property?

This is one of the most important things to map out: how and when do you organise your financing and what do you do when you’ve found a home you love?

It’s perfectly fine to not have a clear idea about how you can get started with home buying.

“A typical first conversation comes down to figuring out someone’s objectives,” says Mathew. “I try to map things out in terms of their goals and then go from there. This helps people understand where to start and what types of home loans align with their goals.”

2. How does pre-approval work and how long does it last?

A core service a home loan expert can provide is diving into your goals and financial details to figure out your borrowing capacity and help you apply for pre-approval. They’ll ask you about what kind of properties you’re interested in, your income, debts, and daily expenses (including those you expect to pay once you own a property). Once you get pre-approval, you can confidently look for properties with a better understanding of how much you can borrow and what types of properties to look out for. Pre-approval typically lasts anywhere between 30 and 90 days, but your home loan expert will confirm this.

If you’re interested in applying for a government grant, such as the First Home Owner Grant, talk to the home loan expert about how to factor these into your pre-approval application.

Talk to a home lending expert

3. What types of loans are available to me?

A home loan expert will talk to you about your goals and borrowing capacity, and what type of loans and loan features might be suitable.

“For instance, you might prefer the stability of being able to forecast your repayments with a fixed-rate home loan,” says Mathew.

4. What do you look at to ensure I can pay back my mortgage?

A home loan expert will look at a variety of factors – such as your income, debts and credit history – to evaluate your suitability for a loan. They should also discuss your goals and expectations, to make sure you understand the impact of potential changes to the property market and interest rates.

5. What if my circumstances change?

All sorts of things can impact your ability to make loan repayments.

Ask a mortgage lender how they can offer assistance to customers facing either short or long-term financial difficulty. It’s a good idea to have an understanding of the process of requesting assistance and what support could be available should it ever become necessary.

6. What are the upfront and ongoing fees and costs?

Knowing the total cost of home financing can help you plan your overall budget.

For instance, if you have less than a 20% deposit, banks will usually add Lenders Mortgage Insurance (LMI) to your home loan. LMI protects lenders when borrowers can’t meet their repayments. It can be several thousand dollars, depending on the size of the loan.

“LMI can be a bit of a shock to some people who are new to loans,” says Mathew. “While LMI can help home buyers enter the market, it can be an expensive additional cost.”

Some other fees to ask about include:

  • application fees
  • ongoing annual or account keeping fees
  • fees associated with making additional loan repayments 
  • transfer or exit costs.

7. How will the loan meet my long-term needs?

Be sure to talk to a home lender about your long-term objectives and likely income and expenses.

For example, if down the track, you might want to upgrade to a larger home and lease the property you’re buying, there may be home loan options that are easier to transfer into investment loans.

Alternatively, if you have expenses (such as school fees) you can plan for over a defined period, your lender could help organise options to help you better manage these cash flow requirements.
 

It’s easy to get the home loan advice you need

Talking to a home loan expert is a great way to plan for your purchase. They can work out how much you could borrow and help match you to the best loan for your circumstances. Best of all, with Suncorp Bank, all consultations are 100% obligation-free.

Speak to a home lending expert

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Home Loans are provided by Suncorp-Metway Ltd ABN 66 010 831 722 AFSL No. 229882 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Please read the relevant Product Information Document, Lending Fees and Charges and Home Package Plus Terms and Conditions before making a decision regarding any Suncorp Bank products. Fees, charges, terms and conditions apply and are available on request or on our Product Information Documents and Forms page.

The information is intended to be of a general nature only and any advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.