Are you an attractive borrower?­

April 22, 2015
Melinda Halloran

When it comes to taking out a loan, attractive borrowers are in the best possible position to get the tick of approval from a lender. As a general rule, lenders don’t like to place themselves in risky situations, so you need to prove to them that you are a reliable borrower.

Once a lender has received your application, they will look at what you earn, any debts you have, your credit history and what you are planning to purchase. If your finances are in check and the property you want to buy appears to be a sound investment, you’ll have the best chance of getting your loan approved.

Here are my top tips for making yourself an attractive borrower:

1. Set a budget

The first thing you need to do is ensure you can meet the repayments of the loan you are applying for. If you aren’t sure how much you can realistically borrow, you can call me to discuss your budget and assess your options, or use this Mortgage Choice calculator as a starting point. 

2. Start saving

Showing a lender that you are good at saving money will help put you over the line. If your savings aren’t where they should be, work out a way that you can start putting money away on a regular basis.

By building up your deposit over a period of time, you demonstrate to a lender that you are responsible with your money and less likely to miss repayments. 

3. Check your credit history

All lenders will obtain a copy of your credit report when considering your application. This report details your credit, previous applications for credit and how reliable you have been at paying your bills in the past.

Should you suspect that you have a few black marks against your name, you can clean up your credit history by obtaining a copy of your report from a company such as Veda. Use this report to identify the organisations that have put a mark against you and then approach them to work out a resolution.

It is wise not to apply for too many home loans, because a lender can access how many applications for credit you have made. Focus instead on choosing which loan is best for you and whether you are likely to qualify for it. If you are overwhelmed by your options, I can help you with this process.

4. Get your documents ready

Paperwork isn’t always fun, but it is something you need to take your time with when applying for a loan. By having all your documents together when you apply for a loan, you make the application process easier for yourself and the lender – and making a lender’s life easier is always a good thing.

This paperwork is required to demonstrate that you are who you say you are and that you are financially secure. Documents to prepare include:

  • Photo ID
  • Proof of income
  • Evidence of your assets such as investments, vehicles and super funds
  • An outline of your living expenses
  • Details of other liabilities such as credit cards or other loans

This is the formula I recommend for making yourself an attractive borrower. For assistance with choosing a loan and preparing an application, I can take you through each stage of the process.

Luke Cashin
0419 733 862 
Your Garden City Mortgage Broker, Brisbane. 

Posted in: Home loans

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