You don’t need luck on your side to ensure a smooth loan approval

March 11, 2015
Donna Sims

Success relies on borrowers of all types ticking all the right 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. 

Applying for loan approval of any type requires more than having good luck on your side.  It’s important to know what lenders will be looking for when deciding to loan money for you to purchase, renovate, or for other purposes.

Lenders have different but fair methods for determining whether borrowers can take a loan secured against a property.  They look for evidence that the borrower is a good saver or has built equity, has a healthy credit record, steady employment and manageable levels of debt.

Working with a professional mortgage broker in the loan approval process may help. They can work with you to complete the home loan application, your mortgage broker will also know the lender’s requirements, prompt you to supply the required documentation and submit the application on your behalf. The broker will then follow up the application, whilst keeping you informed every step of the way to settlement.

To put you on the road to a smooth loan approval process here is a 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 your credit – Check whether you have multiple enquiries 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
  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 accounts.  If this does occur, include an explanation for the transaction.
  4. Document your debt – Lenders will require you to list your current financial commitments, such as rent, personal loans, credit and store cards, HECS debt, child maintenance etc. Keep in mind the amount owed on your store card and credit cards won’t be the key factor for lenders, when assessing your ability to repay the loan, lenders will consider the overall credit limit. Remember to have these records on hand.
  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 mortgage broker to help you research the mortgage market before applying for a loan.

Jess Darnbrough in conjunction with the West Real Estate Program explains the Pre-approval process very well in this video:


For further information call your local Perth broker today Steve Sims on 0433 124 081 or call our office to book an appointment on (08) 6144 3230.


Posted in: Home loans

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