When applying for a loan it’s important to keep in mind that someone else is watching before making a purchase. Everything you do & spend will be analysed during the application process.
Be organised
Prepare as much information as possible. This includes bank & credit card statements, income details, your budget and considerations for expenses that will appear after settlement like council rates, insurance or Body Corp fees. Don’t forget things like school fees, Streaming Services (like Netflix) and other regular payments that may appear on your credit card.
Minimise expenses
In the 3-4 months prior to applying for a loan, it would be good to work on reducing your spending. Keeping your Uber Eats in check & having no shopping sprees could make a considerable impression on your chances of approval.
Your Credit Report
Since July 2018, banks and brokers can now receive their client’s personalised credit file, which provides more information about their repayment history and debts. If you’re even one day late paying your credit card or phone bill it could be recorded on your credit file and kill your application. This also included enquiries from other companies about your credit, ie ZipPay, ZipMoney and possible Afterpay. Banks generally don’t like to see any more than 6 credit enquiries over a 12 month period.
Technology tells all
Remember that all digital transactions are being tracked and some purchases could come back to haunt come application time. Did you really need that post Christmas shopping spree?
Buy now, pay later
Matt, from MC Mortgage Solutions calls this “spending tomorrows money today”. Afterpay and Zip Pay are categorised as debt, viewed in the say way as credit cards. This means that missed payments and interest charges on them could potentially be viewed as default. It also means that the limit of your pay later accounts can be accessed as a liability in the same way they do credit cards.
The banks have really tightened their belts in the last 12 months. Even the smallest of changes to your finances can make a huge difference. There’s never been a better time to enlist the help of a Mortgage Broker to assist you with your application.
