According to online mortgage lender MyRate.com.au the advice for anyone applying for a home loan is clear. Their top tips included saving a deposit and cleaning up your credit file.
Most mortgage brokers agree that when applying for a home loan it is important to research carefully, and put forward the best application that you possibly can. This means getting all of your financial documents in order and comparing loans with a variety of lenders.
MyRate spokesman Kevin Sherman said that with lending criteria becoming a lot stricter in the past 12 months, people could benefit from understanding how these changes would affect their chances of securing a home loan.
So for the best home loan application there are a few things to take care of.
Firstly, ensure that you have saved a minimum of 5% deposit. No-deposit home loans are no longer easily accessible, in fact most lenders have stopped offering them all together. Since the global financial crisis, most lenders have tightened their lending criteria and you cannot borrow more than 90% of the purchase price with most banks.
Secondly, ensure that you can service the loan. If you do not have a regular income, this may be hard to prove. Or if you have recently started a new job, you may have to wait a few months to prove secure employment.
Another factor in home loan approvals is the borrower may not be clear over the type of property they wish to purchase. Ensure the property you are eyeing up is suitable.
Lastly, if you have any issues with your credit file, this is viewed as a problem. If you have ever been denied finance for any reason, or have been applying for lots of loans, this reflects on your credit score.
All lenders are now looking more carefully at potential borrowers. So you must be prepared and get organised. Prove the lender that you are a great candidate for a home loan by showing your ability to repay the loan.
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