What makes an attractive home loan customer?
If you’re nervous about sending off an application for a home loan, don’t worry, you’re not alone. Applying for a home loan and the eventual purchase of a property, is both an exciting and a daunting experience. While you may think that the odds are stacked against you, you can tip the scales in your favour by learning what we look for in our borrowers.
We can’t guarantee you the loan, but we can tell you just what makes an attractive home loan customer for us. Ask yourself these questions:
1. Are you financially fit?
To save for a substantial deposit and to give us reason to believe you are able to meet the repayments of a home loan, we need to know that you have a regular saving habit. Are you paying your bills on time? Do you abide by a budget? Do you have enough money left over to meet unexpected expenses? If you answered yes to all of the above, it sounds like your habits are in check.
If you’re not all the way there yet, consider taking smaller steps to getting your finances in shape, such as cutting back on unplanned purchases. The most important step, however, to getting savvy with your money is to create a budget – and stick to it. Beyond Bank Australia will only provide a loan to borrowers who can afford the repayments. We cannot lend to you if the loan will put you under financial hardship, so make sure your finances are in check before applying. We want you to get the loan that is right for you so you can buy the home you’ve been dreaming of.
2. Do you have borrowing capacity?
Your borrowing capacity refers not only to the money you have saved for your deposit, but also takes into account your income less any existing debts, personal expenses and your new loan. If you have too much debt, and a lender cannot see how you can make all repayments and have money left over, this may affect your chances of getting a home loan.
If you’re in the clear, be realistic about your borrowing capacity and ensure you have a rainy day fund to cover the unexpected, rather than just enough to meet the bare minimum terms of your loan. Your loan repayment calculations from Beyond Bank will include a buffer should interest rates rise, but there can be other expenses that occur down the track you need to be prepared for.
3. Have you addressed your credit history?
If you’ve ever been late on a payment for a loan or even a phone bill, there’s a possibility this could have affected your credit score negatively. You can check your credit score online on sites like Veda.
While you can’t hide defaults from your lenders, you can address why it happened and show your lender that you have healthy habits in place to ensure it will not happen again.