Obtaining Finance

Buying an apartment is exciting, and if you’re borrowing money from the bank, there are some steps that we believe should be taken.

So before you even make the decision to buy an apartment, you need to have a pre approval from the bank as to how much you can borrow, and whether or not you think you can afford the repayments.

Effectively, a pre approval is preliminary assessment of your finances, and will give you confidence when you go to the bank for a loan application, and should eliminate most surprises. The assessment will outline your borrowing capacity (ie how much you can borrow), the costs associated with the loan(s), and how much you will need to contribute in order to get the loan.

Once you have been pre-approved, then you can start looking for the property you want, and within your budget.

Size does matter.

When it comes to off-the-plan apartments, size can affect the finance process. Some banks, in order for the loan to qualify as a home-loan, must meet certain sizing standards. If the size of your apartment doesn't fit into their guidelines, there could be trouble in securing the loan, or you may have to pay a larger (higher %) deposit.

Generally, and as a rule of thumb, the apartment must be at least 40 sqm in order to pass most lender guidelines. This includes both indoor and outdoor areas of the apartment. If you are confused about how big your potential apartment is, please refer to our measurement guidelines here.

When should I start applying for the formal loan?

So you’ve found your place, you’ve paid your deposit, and your settlement date is 12 months away.

We suggest that you apply for your formal loan around 2-3 months before the settlement date, to allow for any hiccups or changes along the way. This amount of time also allows you to browse the lender market, and make an active and informed decision. 

For those who are a little nervous about choosing a loan, and letting the banks define what loan you are getting, a mortgage broker may help?

A mortgage broker can help discuss your financial requirements, analyse your requirements with certain loans, explain the types of loans you can choose from, give you all the fees and costs associated with the loans, and help you submit that loan application to the specific lender that you choose.

This is merely advice and suggestion, and is by no means responsible, nor a legal, guideline. Contact a professional for more succinct and reliable information.