June 14, 2017
Most people want to find the perfect match and live happily ever after. We also want to find the perfect loan and live in a great relationship with our financial institution. We need to take the same approach to attracting the ‘perfect loan’ as we would to finding the ‘perfect match’.
Are you prepared for the new relationship?
On a first date, we present ourselves in the best possible light. Thought and preparation goes into the date whether it is with a new outfit or making sure we brush our teeth! Have you prepared for your new relationship with a financial institution? If you want a financial institution to loan you money, you need to show that you are a ‘good risk’ and can afford to pay it back. This includes saving up the deposit (usually up to 20%) and ensuring that the house or car you choose matches with your income. They may also look at your rental history.
Are you ready to commit?
Committing to the new relationship will mean being transparent and forthcoming with all aspects of your life. Holding back important information will make it more difficult to bring it up later. If you are self-employed, it may be possible to write down your earnings against expenses to minimise the tax you are paying but be aware that in your relationship with the financial institution, they will only take your ATO taxable income if the asset is to be owned in personal names. All financial institutions approve loans based on formulae. The formula uses your income minus any current loans, and then deducts the higher of what you say you spend vs what the financial institution believes will be your minimum monthly living expenses. They will no longer accept the ‘I can afford it!’ statement.
Are you 'high maintenance’?
‘High maintenance’ individuals can be a lot of fun to be around but they can be stressful in a long term relationship. Needing to have the best or next new thing can be expensive. Are you laden down with consumer debt? Credit cards are very convenient but too many credit cards (even with zero balances) will restrict the amount you can borrow. The financial institution will look at all loans (including any outstanding HELP loans) and credit cards when assessing the amount you can borrow.
Have you got rid of any ‘baggage’?
Going into a new relationship is exciting and you don’t want it spoiled by emotional (or financial) baggage from a previous relationship. In the same way, defaults on credit cards, phone plans and other loans will come back to haunt you and result in either a ‘decline’ on your loan application or having to pay an increased interest rate.
Are you still looking?
Ever been on a date where the other person is much more interested in checking out other people rather than talking to you? Financial institutions can be wary of people who have made a number of applications for finance with different institutions over a short period of time. Brokers can work with you to decide the most suitable lender and loan and THEN apply for your loan.
Need a Matchmaker?
At times, a traditional Matchmaker might seem a good idea when embarking on finding a new partner. They get to know each of the parties and look at aspects of their lives to assess their compatibility. If you’d like to talk to a financial Matchmaker to make sure you find the right loan for you, call Mark on 0403 577 287.