Steps you can take to improve your financial position
With so much financial scrutiny, it’s best to take steps to get your finances in order before you apply for a home loan.
1. Save for a deposit
In Australia, mortgage lenders prefer a 20% deposit. Even if your financial picture isn’t perfect, a larger deposit may persuade lenders to overlook minor issues and grant the loan anyway.
If you’re struggling to get a deposit together, is there someone who can help? Having a guarantor, like a parent, who is willing to sponsor part or all your deposit is one way to overcome this hurdle.
2. Lower your expenses
Even if you can cover all your monthly expenses comfortably, it’s possible that your home loan application may still be denied. That’s because lenders also take into account an applicant’s ability to service a loan.
Too many monthly expenses make them question whether you have enough room in your budget to take on another loan or cover an interest rate increase in the future. So try to keep your monthly bills as low as possible and cut out unnecessary expenses.
3. Maintain a good credit history
If your credit history is less than stellar, work on improving it. Avoid skipping or paying your bills late and don’t acquire new debt. If you do run into hard times, inform your creditors so they can work out a more affordable payment plan for you.
Each mortgage lender has its own criteria for home loan applications. At Well Home Loans, we want your dream of buying a home to become a reality. We’ll assess your eligibility online and within seconds you’ll know if you qualify for a home loan.