Are you dreaming of a new home but worried about your application getting rejected? Lenders want to make sure you have the capacity to pay off your home loan and will take a close look at your spending habits. Here are five ways to improve your chances of home loan approval.
Have a Stable Income
Lenders want to be sure you can comfortably repay your loan. Demonstrating a stable income is crucial. It is generally advisable to be in a full-time job for at least six months before applying. However, the specific requirements can vary among lenders, so it’s essential to consult with us to understand your options thoroughly.
Reduce Your Debts
Outstanding personal debts can limit how much you can borrow. Consider paying off or minimising your debts to increase your borrowing capacity.
Lenders also look at your access to money. If you have a credit card with a limit of $10,000, a lender will factor this full amount when working out how much you can borrow – even if you only owe $100.
Show Discipline in Your Spending
Lenders scrutinise your spending habits. To increase your chances of a home loan approval, cut down on discretionary expenses like dining out and unnecessary online shopping a three to six months before applying. Regularly set aside a portion of your income to demonstrate your commitment to saving. Timely rent payments can also serve as evidence of your saving habits.
Consider a Guarantor
Having a family member as a guarantor can significantly enhance your chances of approval. A guarantor uses their property equity as security for your loan. This option can be beneficial, but it’s crucial to understand the responsibilities involved—for both you and your guarantor.
Choose the Right Lender
Each lender has unique criteria for evaluating mortgage applications and tailoring your application to the right lender significantly increases your chances of approval. Rather than going to different lenders on your own, you can rely on us to identify lenders who are likely to view your application favourably.
Don’t worry if you can’t meet all these criteria on your own. We specialise in creating compelling applications that showcase you as a reliable borrower. Our expertise can make all the difference in your home loan journey.