Financial Services

What to Do to Get Approved for A Home Loan

We all want to have our dream home as soon as possible. Unfortunately, not all of us are born with a silver spoon and to have a home we could call our own, we have to apply for a mortgage. Applying for a mortgage is a nerve-wracking experience. You need to fill lots of paperwork and you have to wait for that call or email to tell you that your application is approved. Otherwise, you’d have to kiss your dream of having your own home goodbye.

Before you start with the application, there are things you could do to improve your chances of getting approved for a home loan.

Monitor Your Expenses

Since there is a chance, you’d end up having money which might be more than what you need for a mortgage, you might think you could spend some of it on unnecessary expenses. This is a harmful way of thinking because lenders would check your spending.

They would analyse and see if you have the ability to repay the loan. Imagine what they would think if you keep on using your credit card and only paying the minimum amount due. They’d think you are spending way more than what you are earning and you would not be able to pay back what you want to borrow.

Postpone Career Shifts

You might think a career move is what you need especially if you are not receiving the salary you think you deserve. Moving to a new job now that you are applying for a loan to cover the added expense might seem a reasonable move but in actuality, home loan brokers Brisbane would advise you to hold this off.

Why? Because it might make you look like you are erratic and that you are not putting down roots. How would they be able to collect payment from you if you keep on moving places? So, postponing any career shifts when you are applying for a home loan could improve your chances because it would show the lender that you are reliable and that you would honour your commitment to them.

Have Significant Savings

We are applying for a loan because we need the money so why do we need to have significant savings to get a loan? Simple. You need to show the lender that in case of an emergency, say you lost your job or you took a substantial amount of pay cut that you still have the means to pay for the monthly instalment fee for the home loan. As a rule of thumb, it is better to have 3 months’ worth of your salary as savings. That way, the lender could see that you have money to pay for your expenses plus the monthly fee.

Ensuring as well that you have all the supporting documents ready to prove that you can repay the loan is necessary. Be also diligent in paying all your monthly bills such as utilities and credit cards on time to show that you are on top of your financial obligations and duties.

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