We all know that having a shelter is a necessity in life, that is why the home loan is one of the most sought after finance products in Australia. Despite its popularity, there are many people who are unsuccessful with their loan applications for some reasons that they might not be aware of. For new borrowers, there are many ways to prevent the rejection of your home loan applications.
Below are the recommended steps to get your home loan approved for the first time.
Keep a good credit rating
Credit rating or credit score determines a borrower’s worthiness when applying for a loan. It determines your ability to pay back your debt based on your previous loans and credit card usage. If you have late payments or you have totally defaulted on a loan, these will all influence your credit score.
In order to get approval for your first home loan application, make sure to have a good – excellent credit rating. It creates a good impression to the lenders. By doing so, you will not only get approval the loan but will also have a better chance for a lower interest rate.
Other factors that will help get your home loan approved the first time is your savings and saving habit. Lenders want to see that you have enough money to cover your living expenses on top of your monthly repayments, as well as your capability to set aside money for future needs. Make a regular deposit to your savings account, whether monthly or bi-monthly. Build a good savings account before you submit a home loan application.
Lessen Your Debt
Existing loans and credit card debts will probably look bad in the eyes of the lenders. They will think that you already have a huge responsibility even before getting a home loan. So it is better to pay off your current debts first before sending out a new loan application. Not only will it help you get the approval, it will also give you an easier time to make your monthly repayments.
Set-up a Budget Plan
It will also have a strong impact on your application if you show a good budgeting habit. Create a monthly budget plan and let it reflect on your payroll and savings account. Set an amount that you want to save then deposit it consistently. It will be better to make automatic transfers and payments using your payroll account to show that you are sticking to your budget. Cut down your expenses and avoid making unplanned purchases so that you can follow your budget plan on a monthly basis.
Get a home loan according to your means
Be as realistic as possible. Evaluate your finances including your monthly income, expenses, assets, savings and, debts. Based on these, understand different loans, calculate the realistic monthly repayments that you are capable of making so when the lenders compare the total loan amount against your finances, they will be more likely to approve your home loan.
Follow the steps above and you will be much more likely to get your home loan approved on the first try. For your home loan needs, apply now with We Are Loans.
Call us 1300 935 626 and one of our finance professionals will help you find the best rates from Australia’s best lenders.