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MORTGAGE HACKS: 6 WAYS TO MAKE HOME LOAN APPROVAL A BREEZE

By Emma Smith

Buying property in Australia isn’t exactly easy. But with a bit of knowledge, a lot of determination and a dash of self discipline it’s certainly possible – and few would question whether it’s worth the trouble.

One of the first hurdles on the road to being a homeowner (and perhaps one of the highest) is home loan approval. To make it easier for aspiring property buyers to take that first step, we’ve formulated five useful tips to make home loan approval far easier.

1. SAVE, SAVE, SAVE

Don’t be like 43 per cent of Australians who, according to MoneySmart, don’t save at all.
More money in the bank will mean you’re far more likely to be approved. Put a comprehensive plan in place and stick to it.

The first thing to do here is calculate how much you’re going to require to buy the house you need, including wiggle-room to account for increasing house prices and extra costs. From there you can set incremental goals and work out exactly how long it will take you to save the amount you need.

As a general rule – the more you’ve saved the easier loan approval will be.

2. CHECK YOUR CREDIT SCORE

Your credit score can be the defining moment when it comes to a lender approving/declining your loan application. It’s a record of your present and past debt, including details of any defaults and even late payments.

It’s used by lenders to profile the risk of loaning you money, making it essential that you take steps to ensure your credit file is clean and have it checked as early as possible. If it’s looking good it can work in your favour – according to a Veda survey, seven out of 10 Australians would use a credit report to get a better deal from lenders.

3. GET RID OF OLD DEBT

Australia’s collective credit card debt currently exceeds $32 billion. It’s time to cut off up your credit cards and pay back that interest-free hire purchase flat screen TV.

This may not be easy, but the fact is lenders will be cautious in lending to anyone who has debt all over the place.

4. DON’T JOB-HOP

Where possible, avoid switching jobs frequently, for the sake of your loan. Lenders might take issue if you don’t, questioning your reliability and your ability to continually make mortgage repayments.

This may be a tough ask, as according to an Australian Human Resources Institute study, average staff turnover around the nation was around 16 per cent in 2015. Keep in mind that if you really feel the need, you can change jobs straight after your loan is approved (as long as you can afford to continue making payments).

5. GO LOW

To make the process as simple as possible, get the right advice and seek help where you need it.
The less you ask for from your lender, the more likely you are to get it. What’s difficult here is balancing your desire to find a beautiful home to live in with finding something affordable that sits well within your budget.

If you’re not ready to compromise on location, perhaps consider an apartment or a smaller place. They’re generally cheaper and are plentiful near the centres of most capital cities. On the other hand, if you need a lot of space, try looking further out from city centres as you’re likely to find something larger and more affordable.

6. GET THE RIGHT ADVICE

Buying a property and sorting out your home loan isn’t easy if you go it alone. When it comes to your home loan, there’s no better help available than a local mortgage broker. Making use of their personalised advice, relationships with lenders and access to a wide range of loan products could make your approval a sure thing.

If you have questions about home loans, contact our sister company, Loan Market, for advice.

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