Success relies on borrowers of all types ticking the check boxes
There is a range of competitive home loan deals available in today’s mortgage market but potential borrowers may miss out on the offers if their loan approval is knocked-back or delayed. To ensure a smooth approval process, Mortgage Choice urges potential borrowers of all types to tick all the check boxes in their loan application.
Local Mortgage Choice mortgage broker, Melissa Jackson said, “Applying for loan approval of any type requires more than having good luck on your side. It is important to understand what lenders will be looking for when deciding to loan you money to purchase property, renovate, or for other means.”
“Lenders have different but fair methods for determining whether borrowers can take on a loan secured against a property. They look for evidence that the borrower is a good saver or has built equity, and has a healthy credit record, steady employment and manageable levels of debt.
“Keep in mind this applies to all types of borrowers, whether it is your first, fifth or fiftieth loan application, lenders will still assess your ability to borrow funds each and every time.
“Having the help of a professional mortgage broker in the loan approval process may help. Working with you to complete the loan application, your mortgage broker will know the lender’s requirements, prompt you to supply the required documentation and submit the application on your behalf. The mortgage broker will then follow up the application and help guide the loan to settlement.”
To put you on a path to a smooth loan approval process, I have compiled a basic five step checklist from which to start:
1. Steady employment and regular savings - Lenders want to see a steady employment history and evidence of regular savings. For existing borrowers, they look for regular loan repayments. Some lenders consider rental payments as savings evidence, but there may be conditions attached, so do your research.
2. Clean credit file - Check whether you have multiple enquires or any defaults in your credit history, and if so, try to resolve them with the relevant credit provider before you apply for a home loan and if need be, provide an explanation to your lender. You can order a copy of your credit file from suppliers such as www.mycreditfile.com.au.
3. Satisfactory statements - Your recent bank statements should be free from any suspicious withdrawals or transfers such as movements of sizeable sums of money into or from your account/s. If this does occur, include an explanation for the transaction in your loan application.
4. Document your debt - Lenders will require you to list your current financial commitments, such as rent car and personal loans, credit and store cards, HELP debt, child maintenance, etc. Have your records on hand. Keep in mind the amount owed on your store and credit cards will not be the key factor for lenders; when assessing your ability to repay the loan, lenders will consider your overall credit limit.
5. Know your limits - For those looking to purchase property, there may be borrowing limitations based on your deposit amount and/or the property’s location, size and type. For these reasons, consider using a local mortgage broker to help you research the mortgage market before applying for a loan.
For further information or to arrange an interview, please contact:
0405 315 227
About Mortgage Choice
Mortgage Choice has sourced a home loan for well over 350,000 people since 1992. It works with all manner of property finance borrowers via hundreds of franchises.
The company writes one in every 25 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many of its brokers provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and providing referrals for risk and general insurances.
Uniquely, Mortgage Choice pays its franchisees the same commission rate for home loans they write, regardless of rate paid by the lender a new customer selects, working in the customer’s best interests to tailor a solution to them.
To cater to the growing needs of our customers, Mortgage Choice soft-launched in October 2012 its new financial planning business. Mortgage Choice Financial Planning will officially launch in FY14.
The company has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA). Recent recognition: 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2012 Australian Broking Awards Best Training and Education; 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.
Mortgage Choice holds an Australian Credit Licence: no. 382869, issued by ASIC.
Visit www.mortgagechoice.com.au or call customer service on 13 77 62.