When you're looking at buying a house, it's important to understand your finances and savings. The banks will consider numerous factors to establish if they are willing to lend you money for your mortgage. Whether you're looking at buying for property investment or owner occupied purposes, keep reading to see our three biggest finance strategies for improving your chances of getting approved for a home loan.
Strategy number one - have consistent savings
Most lenders will need to establish whether you have genuine savings. In most cases, they'll accept funds amounting to 5% or more of the property purchase price. They'll need to establish saving trends with your finances, generally over a three month period. To satisfy most lenders, genuine savings are;
savings that have been held or term deposits that have been accumulated for three months
shares or managed funds saved for three months
inheritance funds that have been held for at least three months
any cash gift held for three months or more
Strategy number 2 - Ensure you have reasonable living costs
The biggest question you need to ask yourself when buying a house is; will you be able to afford your mortgage after paying your living costs?
Lenders will do this when accessing your ability to access finance. If you apply for a home loan, banks will also assess your current living expenses and financial commitments. After any stream of income reaches your bank account, lenders will look at your; savings, investments, expenses, debts (if any), and other financial commitments that support your living.
Strategy number 3 - Pay your bills on time
You'll need to be able to show your lender that you have the ability to repay your mortgage. If you're entering the Australian property market, your lender will need to determine if you have a clean track record in your comprehensive credit reporting. Your credit rating will contain a history of companies that you've owed money to. If you've been 15 days late on paying a bill, this will get marked against your credit file. So, it's important to be aware of your current credit file status by reviewing it regularly.
More information
For more information on these three strategies, check out this video by David Chehade:
If you're wanting to access finance for a home, we would love to be able to assist you! We're helping investors, owner-occupiers, and first home buyers across the country to access lending to buy property. Our details are provided below:
Ph: 1300 130 932
Email: clientservices@reif.com.au
