There are two types of home buyers: people who are buying their home and people who are buying for investment to rent out. If you’re planning to buy a property with the intention of making it your primary residence the right loan for you is an owner-occupied home loan.
What is an owner-occupied home loan?
As the name suggests, an owner-occupied home loan is for borrowers looking to purchase a property to make it their home. It allows you to borrow the amount you need to purchase your new home. It could be an existing home, build a new property or renovate an existing property.
When you’re buying a home or unit you intend to live in that property is called owner-occupied property.
Things to consider
It is extremely important not to misrepresent your intentions for a property when applying for a home loan. It’s tempting to try to obtain an owner-occupied home loan no matter what your intentions are because of the differences in rates. But loan agents are trained to evaluate whether their borrowers are committing occupancy fraud.
There are better ways to obtain the best possible rates for your mortgage. You can still increase your borrowing capacity despite Australia’s banks and lenders tight requirements.
How to get an owner-occupied home loan?
Lenders require borrowers to provide information about the value asset, their income and liabilities such as existing debts. They evaluate your application with these details and other considerations, including credit history, the borrow you intend to borrow and the loan type.
Simple steps you can take as a borrower
The rules of applying for a loan is ever-changing but there are various simple steps that you can take to put your loan application in the best position possible.
Maintain a good savings history
The lenders will like what they see if you have a good savings history and accurate records of your financial affairs. It will position you as a low-risk applicant for the lenders.
A good credit score
Lenders will check your credit score when they assess your loan application. Borrowers who have an accurate credit score and a good financial record are likely to get their loan approved.