First Mortgages

1. It sounds simple, but there needs to be a sound reason for the loan. And most lenders will require an expectation of how the proceeds will be used.
2. Work out your repayment schedule to make sure you can afford to repay the loan on time.
3. Consider your credit score, as this will affect the type of lender that will consider your application. For instance, if you have a high credit score, you’re considered a lower risk applicant. Conversely, if you have a lower score, you’ll be seen a higher risk to the lenders. Typically speaking, banks favour higher credit score applicants. Non-bank, specialist, private lenders and fintechs are more receptive to borrowers with lower credit scores.
4. Compare lenders and the types of loans they offer, including lending policies, interest rates, and other fees.
5. Get your documentation in order in advance, as this can help expedite the loan process (keeping in mind that each lender will have different requirements).

Here are some common first-time homebuyer mortgage options:

• Construction loan. A construction loan provides funding so you can build your home.
• Low-doc loan. This is ideal for self-employed borrowers who want to apply for a mortgage loan but don’t have the standard paperwork. A low-doc loan requires minimal documentation.
• Introductory loan. An introductory loan offers low-interest rates (also known as honeymoon rates) which typically last for around 12 months before they increase.
• Interest-only home loan. This type of mortgage requires the borrowers to pay down only the interest for a certain period.
• Fixed and variable home loans. Fixed mortgages have fixed interest rates throughout the loan term, whereas variable mortgages have fluctuating rates that are parallel to the market.
• Split loan. A split loan allows you to make a part of your loan fixed and the other half variable.
• Guarantor home loan. With a guarantor home loan, you ask a family member to be your home loan guarantor.

And don’t forget to check if you’re eligible for any government initiatives for first home buyers.

Again, this varies from lender to lender as well as the type of lender (i.e. whether it’s a bank, private, specialist lender or a fintech). It will also be affected by your income, living expenses, whether you have dependents, or if you have security (usually meaning another property), to name a few.

Mortgage terms vary greatly depending on whether you’re borrowing for personal or business use, along with the purpose of the loan. A long-term loan from a traditional lender, like a bank, can go for up to 30 years. Conversely, there’s an increasing demand for short-term first and second mortgages that typically have a term of two to 36 months.

Mortgage repayments are calculated by various factors, including the loan amount, interest rate, repayment frequency, loan type, and loan length. Mortgage calculators are widely available to provide a clearer indication of the repayment schedule.

Each lender will differ regarding the documentation required to secure a first mortgage loan. Common requirements include business and personal bank statements, tax returns, business financial statements, business plan, certificate of incorporation and other business legal documents. The good news is that we only require your most recent council rates notice and your most recent existing mortgage statement when considering your loan application.

Processing times for a first mortgage loan largely varies among lenders. Here at Mango Credit, an application gets approved usually within 24 hours, and funding is typically available within 3-5 days from the approval of the application.

Different lenders have varying first mortgage loan application requirements and processes. At Mango Credit, you can submit an enquiry by phone, email or apply online. Upon receiving your enquiry or application, we email an indicative quote that details the interest rates, costs, loan structure and document requirements. If you agree with the proposal, we then issue a formal and more detailed letter of offer. You return the signed proposal with the required documents, and we ask our solicitors to issue security documents or order a valuation if needed. Once we receive the security documents, we settle by electronic transfer of funds. Click here to apply for a short-term first mortgage loan.