Here in Australia, we love our real estate. And at some point in your life, you’ll no doubt aspire to own your own home.
In fact this year Australian Bureau of Statistics data shows that a record number of first home buyers entered the property market with 13,040 loans being approved in September alone. That’s a 6 percent increase from the previous month and 45 percent higher than the same month in 2019.
Currently there are more than 10.3 million properties in Australia with 6 million of these having mortgages against them.
So how do you become one of these homeowners? You can start by improving your financial record and follow these tips.
Show you can make repayment
Being able to show you are effective at making repayments is a crucial requirement for lenders.
This doesn’t mean they’ll want to see written budgets, but they will explore your living expenses and financial commitments and assess this against how much your repayments will potentially be.
Having a savings plan for extra money or paying extra on a personal loan are also good ways to show you are being proactive with your “spare change”.
Check your credit rating
Checking your credit rating will give you an insight into how lenders will view you.
Your credit score is important because it may influence how much credit a lender will give you. The lower the score the bigger risk you are to a lender.
Accessing your credit rating early also gives you the chance to fix up anything that isn’t correct. Perhaps you missed a phone bill a few years ago and this has negatively impacted your credit score.
There are a number of free online credit rating tools available. However your mortgage broker also has access to sophisticated tools, so they can assist you with this.
Tidy up your debts
Financial commitments and personal loans can impact your application.
It’s a great idea to pay these off and make some changes before you commit to a home loan.
Some things could impact you are credit card debt, AfterPay debts and personal loans.
If the debts are too high to pay off, talk to your mortgage broker about consolidating them.
Have some savings
Showing you can save is a big bonus. Not only can the amount of money you put away be used to meet your loan repayments it could also form part of your home loan deposit.
The larger the deposit the less you need to borrow and the more likely you’ll be approved.
It can also show you have a safety net in place and you’re planning for the future.
Ensure your employment is stable
This may be difficult in today’s economic climate but showing employment stability can go a long way in approving your loan.
Having the same job for several years is seen as a very good thing by lenders.
If you have to change jobs, try to be with your new employer for at least six months before applying for a loan.