GETTING HOME LOAN READY IN 2023

General Manager, Pivotal

When it comes to buying property in Australia, prospective home buyers face a few hurdles in getting a home loan. While some may be struggling to save a big enough deposit, others are restricted by affordability in the wake of rising interest rates and a higher cost of living. For most, economic uncertainty and tighter lending conditions have made the lending landscape a bit tricky to navigate! Here are some tips from the Pivotal Financial team on how to prepare your finances ahead of applying for a mortgage.

Every lender has their own policies and set of rules for getting a home loan. To minimize the chances of your mortgage application getting knocked back or delayed, it is vital prospective home buyers consider every dollar spent. How can you get loan ready?

/ Assess your expenses prior to applying for a home loan and change any spending habits that may be viewed by lenders in a negative light or that could hinder your chances of being approved for a loan. Ideally, do this for at least three months before applying for a mortgage.

/ Cut back on After Pay or Buy Now Pay Later purchases as these could seriously hurt your chances of being approved for a loan.

/ Be ready to disclose everything that involves your finances, including your income, savings, investments, expenses, existing debts and any other financial commitments.

/ Ensure your credit rating portrays you as the ideal borrower. Repay your debt on time and in full and avoid late payments

/ Reduce your credit card limit and stick to just one credit card with a reasonable limit. The higher your limit, the less money lenders can responsibly lend to you.

/ Job stability is important to lenders so ideally you want to be in the same job for at least six months, or if you have recently changed jobs, in a previous similar role for a minimum of two years.

/ Keep focused on putting away savings for your deposit, and if possible, save 20 per cent of the purchase price of a property to avoid having to pay Lenders Mortgage Insurance(LMI). The bigger your deposit, the less you must borrow, so the lower the risk you are to a lender.

HOW CAN PIVOTAL FINANCIAL ASSIST YOU? THE TEAM WILL WORK WITH YOU TO:

/ Assess your needs and unique financial position, then recommend loan options and strategies.

/ Explain the entire process from start (application) to finish (settlement).

/ Assist with all paperwork required. Before submitting your application, we will look at your living expenses in the same way lenders’ credit assessors would and ask you about the spending habits that could decrease your chances of getting a loan approved.

/ Collaborate with all those involved in purchasing your home such as solicitors, real estate agents and lenders.

/ Conduct regular reviews after settlement, making sure you are supported and still enjoying the most competitive deal for your situation.