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Now that you have lodged your home loan application, it is time to hit the sales and pick up the best furniture on show or is it?

The road from home loan pre-approval to approval is a precarious one and borrowers are advised to maintain the status quo in order to avoid rejection.

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Here’s what HashChing recommends you to do to improve your chances on getting approved.

1. Stick to your employer – Well, at least until your loan application is approved! Lenders always prefer candidates with a regular flow of income and any fluctuations or change in job may reflect poorly on your repayment capacity.

2. Hold off on big purchases – Even though you feel you could afford that car, buying a valuable asset could significantly alter your debt-to-income ratio; potentially leading to raised eyebrows from the lenders. It is prudent to wait until approval before considering any big purchases.

3. Curb the Credit – It is not a great idea to open a new line of credit or make large transactions on your credit card during the wait. These may appear on your credit report.

4. Pay those bills – Late payments reflect badly on your credit score (even that unpaid phone bill can hurt your loan application!). Continue making regular utility payments and do not close any existing credit cards (especially ones with outstanding debt) as this can seriously alter your credit rating for the worse. This also means paying all your debts, fees and fines on time.

5. Get the paperwork right – Lenders ask for specific documentation to establish your credit history and repayment capacity. Provide the necessary loan documents for your home loan application.

6. Sourced Payments – Your family may be generous enough to help you with your deposit, but do not let the gesture turn sour. Ensure that you submit proper documentation to verify the source of any amount transferred to you that is more than 50% of your monthly income. Un-sourced payments may be viewed as credit by lenders.

7. Accessory costs – Whilst you may think that your loan will cover your purchase, there is nothing worse than falling short by a thousand dollars on ‘Judgement Day’. Remember to allow for additional costs such as stamp duty, application fees, mortgage insurance etc. There are many calculators that can help.

8. Cheapest is not always best – Do not base your decision solely on the rate of interest instead choose the loan that fits you best. Loans with flexible repayments, overdraft facilities and other extra benefits maybe better in the long run. Understanding the structure of your loan is a key to healthy financing! Whilst it may have nothing to do with approval, it will save you a lot of trouble post-approval!

Repayment Calculator has been with us since ages but HashChing has glorified the way a nomad should use it. Just compare weekly home loan deals can help you make sound decisions about your future!

 

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HashChing is helping Australians by providing access to the pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

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