When your family starts growing and your current place feels a bit cramped, it's time to think about upgrading to a larger home. As a concreter, you've got unique financial circumstances that require specialist understanding when it comes to home loans. Let's walk through what you need to know about purchasing a bigger property that'll give your family the space they deserve.
Understanding Your Borrowing Capacity
Your borrowing capacity determines how much you can spend on your new family home. Lenders look at several factors when calculating this:
• Your regular income from concreting work
• Any additional revenue streams
• Your current expenses and commitments
• Your financial situation including savings and existing debts
As a tradie, your income might fluctuate seasonally or project-to-project. This is where working with a mortgage broker who understands the trades industry becomes valuable. They know how to present your income to lenders in the most favourable light.
Exploring Your Home Loan Options
When you're ready to access home loan options from banks and lenders across Australia, you'll encounter different types of loans:
Variable Interest Rate Home Loans
Variable home loan rates can go up or down with market conditions. This means your repayments might change over time, but you could benefit when rates drop.
Fixed Interest Rate Home Loans
A fixed interest rate home loan locks in your rate for a set period, usually one to five years. This gives you certainty when calculating home loan repayments and helps with budgeting for your growing family.
Ready to get started?
Book a chat with a Finance & Mortgage Brokers at Tradie Home Loans today.
Managing the Loan to Value Ratio
The loan to value ratio (LVR) is crucial when buying a home. It's the percentage of the property value you're borrowing. If you're purchasing a $600,000 home with a $120,000 deposit, your LVR would be 80%.
Keeping your LVR at 80% or below helps you avoid lenders mortgage insurance (LMI). However, if you need to borrow more than 80% of the property value, LMI isn't necessarily a deal-breaker – it just adds to your loan amount.
The Application Process
Applying for a home loan involves several steps, but understanding what's required can help you prepare:
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Gather Your Documents
- Bank statements (usually three months)
- Tax returns and financial statements
- Proof of income including invoices and contracts
- Details of assets and liabilities
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Get Pre-approved
Home loan pre-approval gives you confidence when house hunting. You'll know exactly what loan amount you can work with, making your offers more attractive to sellers in the competitive property market. -
Complete Your Home Loan Application
Once you've found your perfect family home, you'll submit your full home loan application with property details.
Making the Most of Your Home Equity
If you already own property, your home equity could help you purchase a larger home. This equity represents the difference between what your current property is worth and what you owe on it. You might be able to use this equity as a deposit or to avoid LMI on your new purchase.
Additional Costs to Consider
When budgeting for your larger family home, remember these additional expenses:
• Stamp duty (varies by state)
• Building and pest inspections
• Legal fees
• Moving costs
• Connection fees for utilities
Interest Rate Discounts and Features
Many lenders offer interest rate discounts based on factors like:
- The size of your deposit
- Your professional status as a tradie
- Whether you bundle other products
Consider features like an offset account, which can reduce the interest you pay over the life of your loan. Money in your offset account reduces the balance on which you pay interest.
Getting Professional Help
Working with a mortgage broker who specialises in the trades industry can open doors to lenders and products that might not be readily available to you directly. They understand the seasonal nature of concreting work and can present your application in the most favourable way.
A streamlined application process means less time filling out paperwork and more time focusing on your business and family. Your broker can also help you understand home loan interest rates and find options that suit your specific circumstances.
Moving to a larger home for your growing family is an exciting milestone. With the right preparation and professional support, you can secure a home loan that works for your situation as a concreter. The key is understanding your options and working with people who understand your industry.
Call one of our team or book an appointment at a time that works for you – we're here to help you secure the family home you deserve.
