The Paper Trail
When applying for a home loan, the more information you can provide, the better your chances of having your mortgage approved. Buy a handy file to store all your documents including:
- Statements of all previous loans and credit cards
- Payslips – last 2 at least
- Most recent 2 income tax returns
- PAYG summaries
- Most recent personal bank statement
- Most recent credit card statement
- Anything else you think is relevant
Have Your Credit Report Up to Date
Before anything, you will need to ensure that your finances are in order. Sit down and assess your credit report – this includes your personal history of all your credit accounts (cards, loans, mobile phone plans etc.), and all their associated repayment histories. These are the first things that your lender will be looking at when you apply for a home loan.
If It's Wrong – Dispute It
Misinformation and discrepancies will hurt your credit score and may cause your application to be denied, so consider speaking to a credit professional to help you dispute these issues.
If It's Outstanding – Pay It Off
Mortgage lenders will be assessing your ability to pay off debts on time. So, if you have anything outstanding, clear them up as soon as you are able to. If for any reason you have recently made a late payment or have paid off any delinquencies, it is probably a wise idea to wait at least 6 months before applying for a mortgage.
Home Loan Deposit Size
Lenders always give preference to those who put down larger deposits. Generally, they consider loans for 80% of the property value to be 'safe'. Keep in mind that they may be willing to stray from their normal lending policy, if you are willing to put down a large deposit. Borrowing less than 80% also means you can also be exempted from the Lenders Mortgage Insurance (a one-off fee that can be quite strict when assessing your mortgage).
Use a Mortgage Broker
A mortgage broker can help you prepare for your loan application so you have the best possible chance of approval, mortgage brokers have access to a wide range of competitive variable, fixed rate and split rate loans from a large panel of leading lenders. This way, you can feel confident knowing you'll get the most competitive interest rates available for your home loan from any of the lenders available to your mortgage broker.