Now that higher mortgage interest rates have become a reality, it’s worth considering a few hacks to make a successful home loan application.
For first-time buyers, the prospect of applying for a loan is one of the scariest tasks of the property-buying experience.
The size of your mortgage determines not just your budget but it may also limit the locations, and style and size of property that you can buy.
When you apply for a loan, it’s standard for you to be asked to state your income, debts and lifestyle expenditure in detail.
Buyers who plan their finances months, or even a year ahead, have the most successful experiences when seeking a loan.
As an experienced mortgage broker, I’ve made a list of hacks that will give you the best chance of getting a mortgage.
Regular income
Lenders love people with a steady job. If you’re self-employed or have income from investments, you’ll find a lender harder to convince. Talk to a mortgage broker like myself about your options if you don’t have regular employment.
Pay off existing debt
If you’ve taken a car loan or a personal loan for a holiday, make sure it’s paid in full before making an application.
Cut out the card
Credit card debt is bad news. The interest rate is through the roof and can hurt your cash flow and credit rating. Even unused credit can harm your application.
Tighten the belt
You want to show lenders you’re responsible with money. Put lavish holidays, expensive dinners and other indulgences on the backburner in the three months before you apply for a loan.
Ready for rate rises
You must be able to service your loan even when the interest rate has gone up 3%. This is a rule set by the Australian Prudential Regulation Authority (APRA), and there’s no escaping it.
This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.