Getting the green light from your lender
When you get to chat with as many motivated homebuyers as we do, you tend to get a clear idea of the issues that matter to them. So it’s interesting to note that there are still lots of people, (particularly those buying a home for the first time), who are uncertain about getting the green light from their lender as quickly and smoothly as possible.
If this sounds familiar, I thought I’d provide a few tips based on our many years of dealing with property and finance. The first tip is a simple one, talk to an independent mortgage broker. They won’t cost you a cent extra, and not only will they be able to provide you with guidance on how to make your application as effective as possible, but they’ll also be able to tell you about deals from different lenders that you may not have heard about.
The second tip involves the lender’s emphasis on serviceability. They want to know that you can still afford to repay your loan if things take a negative turn in your life. So before you apply for a mortgage loan, make sure you’ve not only reduced any loans that you currently have, but reduce the amount you COULD borrow. For example, reduce the credit limit on any credit cards, as the lenders will treat your credit limit as a liability, even if you owe nothing on the card.
You also need to be aware that the lenders will make assumptions about your living expenses even if you are not currently spending them. For example, if you currently live with your parents in order to save a deposit more quickly, the lenders will assess your income on the assumption that you are incurring certain living expenses, using standardised industry benchmarks.
One other tip you may want to consider is the banks’ view of reliability. Not only does this include checks to see if you pay your bills on time, and that you have a proven track record of saving money regularly, (as opposed to a large single cash deposit that might look like a gift from a family member), but they will also check how often you’ve changed jobs in recent years as well.
As I mentioned earlier, we tend to find that buyers who deal with an independent broker tend to have a much smoother time when buying than those who decide to deal direct with the banks. I you need a referral to a broker with a track record of success, don’t hesitate to give us a call. Of course, if you have any questions at all about buying or selling in the current market, feel free to contact us at Barry Plant Thomastown on 9466 3233.
Regards,
Con Constantinou
Barry Plant Thomastown