For most aspiring homeowners, getting a home loan is usually part of the deal. With banks tightening their policies, some find that applying for one may be a tougher road than expected. Years ago, people were saved the scrutiny of endless checks. But now we find our costs being examined right down to our morning lattes and online shops. Here are some tips we find useful to increase the chances of getting the loan you want:
Boost Your Savings
A way to appeal to banks is to prove you are good at saving money towards big ventures. Despite the cost of everyday living, having savings records to show you can still save a little for a rainy day will show that you can cope under pressure. As banks rarely let people borrow 100%, the 80% you may be granted still leaves 20% of the overall cost unaccounted for – this is where your own money becomes important.
Settle Outstanding Debts
It doesn’t look great when getting a home loan you have a list of unpaid debts still waiting payment. Your debt-to-income ratio will be used by banks to see how well you will be able to carry extra baggage once you are paying for your mortgage. The lower the ratio, the higher the chances that you will get approved for your loan.
Be Wary Of Afterpay/ Credit Cards
Though they can be handy in our day to day lives, having outstanding payments and overdue fees on Afterpay or overdrawing your credit card may be that final hurdle standing in front of you and the loan you need. If you do have a big credit card limit, consider reducing it or cancelling it altogether. Banks will be more appeased if you have just the one card with a reasonable limit.
Check Your Credit History
When getting a home loan, borrowers should always make extra special care to revisit their credit report once in a while. Your credit rating will be taken into account by banks to gage an idea on just how well you will perform as a borrower, and whether you are deemed too risky. To increase your chances of getting your home loan application approved, be sure to get ahead in the game and check your credit history before submitting your application. This is vital to check that companies haven’t made a mistake in their processing, or if they have you can amend this before presenting it to a bank and jeopardizing your chances. For instance, an old credit card account might still be charging you despite you no longer using it.
Show You Have A Stable Employment And Avoid Career Changes
As it is generally your income that will be used to pay your mortgage, lenders will want to track that you can hold down a stable and secure job whilst being faced with home repayments. Banks will like to see that you have stayed within the same company for the duration of longer than six months. Having job loyalty to the same company for years will put a green tick next to your name, as it shows you have some solid security. If you have switched jobs in the last six months, don’t stress! Banks can see your prior employment history.
Don’t Apply With Too Many Lenders At Once
Some people think the golden rule when getting a loan is not never put your eggs in one basket. Well, this is 100% wrong and could damage your credit rating! While comparing lenders is sometimes helpful, submitting loans all across the board will reflect in your rating and start to appear as a red flag for banks.
Whatever you are looking for in a new home, make sure to speak to our independent consultants. They are here to help you 7 days a week and assist you with all of your queries regarding the new home building process or even investment opportunities. Call them on 1800 184 284, or book a call online.
Let us do the legwork for you.
- We’ll ask the right questions to better understand your needs
- We’ll create a recommended shortlist ideally matched to you
- We’ll answer specific questions or concerns related to home building, land purchasing or financing
Breanna Taylor
Breanna Taylor is a third-year journalism and PR student studying at Swinburne University in Hawthorn. She has a strong passion for interior design and a growing interest in property development and renovation.
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