If you’re in the market to buy a property, one of the most important things to consider is obtaining a pre-approval from a lender.
While we can assist you with advice on the best structure and best home loan options to suit your needs, there are a number of things you can do to improve your chances of being approved.
Lenders look at your application and will assess it based on your ability to repay the debt, your track record of paying off debts and how much deposit you are able to put down. The lower your deposit, the more risk you present to the lender. By saving a larger deposit, your chances of being approved for a loan might increase.
You can be sure that most lenders will take a close look at your history of paying off debts, also known as your credit score. If you have any outstanding loans that you have a record of late payments, you should look to get back on track before applying for more credit. Part of our process is to obtain a copy of your credit report, review the report and look to see if there are any potential problems. It’s also a great idea for your to review too. If you do find an error in your credit report, it is imperative that you let us know asap. We will put you in contact with a credit-fix agency to help you sort it out prior to applying for a home loan.
Any short-term debt with high interest rates will hurt your borrowing capacity and make it harder to get finance. Be sure to pay any credit card debt in full each month and try to avoid taking out unnecessary loans. If you do have other loans, we can certainly offer you some advice as to see how best to manage them moving forward.
Lenders like to see that you can manage your money. They’ll want to see at least three to six months’ worth of bank statements to make sure you have genuine savings and that you are going to be able to afford your home loan repayments. We also ensure you have a sufficient “sleep at night” funds buffer for any unforeseen circumstances or extra expenses you hadn’t planned for.
Having a track record of steady employment or business income is crucial, as it gives your lender confidence that you have funds coming in each month to repay your loan. There are lenders that specialise in new businesses and self employed clients just as there are traditional lenders that like having a lower risk and sticking with PAYG clientele. We will choosing a lender that best suits your employment situation.
If you would like to find out more about investing in property, or anything finance and/or property, the best place to start is to contact us for advice. We are only an email or phone call away, on 02 8004 2222 or book an appointment.
Although we are located in Crows Nest, we service clients from St Leonards, Artarmon, Wollstonecraft, Cammeray, Northbridge, Naremburn, Neutral Bay, Greenwich, North Sydney, Waverton to Willoughby and all areas of Greater Sydney.
PS This article is prepared based on general information. It does not take into account individual financial or property objectives or needs and is not financial product or investment advice.