Until today, many Australian are still relying on loans to be able to buy their first home. However, the process of getting a loan is always challenging. Because of high demands, lenders in Australia have become more selective in providing loans and conduct thorough evaluation process for every application.
If you have dreamt of buying your own home or an investment you desire for a while now and getting a loan is something that is crucial to the successfulness of the transaction, then follow the tips below and getting a loan will no longer be a wishful thinking.
- Provide proof that you have a stable income. This is one of the most important factors in getting a loan. Lenders prefer someone who has a stable income, and the way to prove this is by having a stable job or a good rental reference. Getting a good rental reference means you have to pay your rental in time every month. If you are thinking of changing jobs in the near future, it is recommended that either you still remain in a similar category to your previous job or wait until your loan has been approved before you change jobs.
- Understand your credit file status. Your credit history also plays an important role to get a positive impression from lenders. Do you know what the current status of your credit file is? Do you have some outstanding debts you have not paid? Lenders utilize this information to provide you with a credit score that will determine the success of your credit application.
- Decrease the number of credit cards you have. If you use more than one credit card, it is recommended to limit the number of credit cards you use as well as decreasing the total limit that you have. When determining the limit of credit cards, it is very important to know that it affects your borrowing capacity.
- Determine your limit. Think about the budget that you are capable of handling and if you are able to pay your mortgage. It is important to think realistically so that you are able to maintain a healthy and strategic financial position that will still allow you to satisfy your daily needs. Try to avoid the situation where your money is burnt out just to pay off your mortgage. You can utilize useful tools in the Internet such as mortgage repayment calculator to give you a better understanding of the amount you have to pay every period.
- Make sure your budget is according to your ability. If your loan had been rejected in the past, now is the time to review your budget and be more realistic in setting your budget. You need to have a positive record in your credit history to be able to get a loan, because it shows the lenders that you are able to save money consistently.
- Utilize the services of a mortgage broker.
Sometimes, it is worthwhile to get a professional to assist you with this process. It is always recommended to seek out a good mortgage broker, as they are the experts in this field. They have a good network of lenders and will help you in every step of the process.
The process of getting a loan approved often seem to be very difficult, especially if your application have been declined in the past. Lenders in Australia have become more selective to people asking for a loan and credit policies are increasingly being tightened. Because of this, it is important to be fully aware of the loan process and make sure that you don’t give lenders any reason to decline your application.
Source: realestateview, Commonwealth Australia, ANZ, Canstar, Australian Credit & Finance
CEA (REIV), CA (MFAA), TAA, CIT (M), CPS (RE), Dipl FMBM, B.Ec (Fin), FIML
Property Writer/ Property Consultant
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