Tips for Getting Your Home Loan Approval in Australia

Nervous about your Home Loan Approval? Feel like begging the bank manager? Before things get to that stage, read out guide for some further clarity.

There are several factors that affect your home loan approval. Lenders are looking for ideal borrowers, ones who have proven savings history, ability to repay the loan and a good credit history. Before you apply, get your financial documents in order and research what information lenders will want from you.

The main things that lenders look for when you apply for a home loan are:

Credit History:
Check your credit cards, see if you can pay down debt and look for any unresolved issues. Something as simple as a missed electric bill could affect your rating. The less debt you have, the better your application will look, and if you can show a tidy and clean credit history this will go in your favour with the lender.

Proof of Income:
Lenders will want to see your income, which may include your salary or rental income for any property you may already have. If you are applying for a alt doc loan less proof of income will be required. All applicants will also have to show savings history, and show that you have a deposit ready to put down. Any assets you have should be declared as well as any liabilities. Then the lender will also want proof of residence and personal identification.

Property Valuation:
Until you have found a property and had it valued any approval will be conditional. An independent valuer will assess the property and then submit a report to your lender and then the value will be decided upon.

Credit System:
All of these steps form the basis of the credit score. Once your application is received, the lender will process the form and load your information into a Credit Scoring system. This gives a weighted score. If your score passes a pre-determined level, you will more than likely be given ‘conditional approval’. If your application is in order, ‘conditional approval’ generally means you are approved, subject to property valuation.

Your application only goes to a (human) credit manager if it doesn’t pass the first time and more information is needed. This is when you may need to provide additional documents or proof of income.

Conclusion:

If you talk to a mortgage broker, they can usually help you get your application together and make sure you put forward your best case. There may be things that you have forgotten or things that simply slip your mind so it can prove useful to go to an expert.