Get financially fit to buy

The age of easy home loans is over, and there are some key things that lenders will be looking for before they give you approval to buy your dream home. Do the groundwork before you approach the bank or a broker and you’ll be thanking yourself later.


Check your credit rating.

If you’ve left a bill unpaid for years, even if you don’t even know about it, there will be a mark next to your name that will prevent you from getting a home loan (or even applying for a credit card in some circumstances). It can be a real headache to reverse a default on your credit rating and often takes a lot of persistence and phone calls but you really don’t have a choice on this one. You can search online for how to check your credit rating.


Pay off your debts

If you still owe money on your car, your credit card and your Harvey Norman lounge suite it will count as a financial liability. It’s a good idea to consolidate and reduce those debts as much as possible, and it helps to be able to prove that you’ve had no trouble with repayments in the past.


Save, save, save

The bank will want to see statements of how much money you’ve been able to put away on a regular basis, which will give them confidence to be your lender. If you’ve had a windfall or been given a loan from family they’ll need to know the details of that.


Keep track of payslips

Similarly, you need to be able to prove your income over the past six – twelve months when applying for a home loan. Having a steady job or showing continuity in the same industry will definitely work in your favour.


Know what you can spend

It’s pointless to borrow more than you can afford to pay off in the long term, even if the bank approves a loan beyond your budget. You don’t want to get stuck in a cycle of late or missed payments as it will further jeopardize your financial future. You need to take into account stamp duty and legal fees involved with buying as well as ongoing costs like water rates, council and strata fees.


Family planning and job security

If you’re expecting a baby, you are legally required to declare this and the bank will take the potential income loss when the baby arrives into account. Also, if your job is a contract that’s due to end you’ll need to speak up about that as the bank examines your future cash flow potential just as much as what you’ve earned in the past.


A buyer’s agent can help you find a property in your price range. For more help contact Amanda On My Side.