How to improve your chances of getting a home loan
If you're applying for a mortgage, you may be wondering if there's a secret to home loan approval. Unfortunately, there isn't - but there are things you can do to increase your chances.
How hard is it to get a mortgage?
Unless you’ve been living under a rock, you’ll know the banks and lenders have seriously cracked down on home lending.
Take this for example.
In one loan application, Mortgage Choice told Savings.com.au that a couple provided a detailed breakdown of their living expenses, only to have the lender come back seeking justification for a $26 fortnightly expense for their child’s swimming lessons.
The lender wanted to know whether the expense had an end date because $26 a fortnight over a 30-year term would amount to over $20,000.
This is just one of the many real-life examples of how tough it is to get a loan, according to Mortgage Choice Chief Executive Officer, Susan Mitchell.
“If people want to improve their chances of being approved for a loan, it is paramount they are financially fit,” Ms Mitchell told Savings.com.au.
According to Mortgage Choice, there are up to as many as 15 living expenses that lenders are closely scrutinising. All the usual suspects are there like childcare costs, groceries and transport, but your reliance on buy now, pay later or your Netflix addiction are also up there on their watch list.
“Before a mortgage broker submits your loan, they will look at your living expenses in the same way lenders’ credit assessors would and ask you about the spending habits which could decrease your chances of getting a loan approved,” Ms Mitchell said.
“This will result in a more robust home loan application and may drastically reduce the time it takes your loan to progress from application to settlement.”
Like it or not, the reality is if you want to minimise the chances of your loan application being knocked back or delayed, you should consider every dollar you spend.
By Emma Duffy
Originally published by Savings.com.au
