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The inside word - what banks and lenders tell us about your finance.

 Yes, we know their little known secrets!

When applying for a home loan, knowing what lenders are looking for can dramatically increase your chances of being approved. Here are a few basics to help guide you in the right direction.

For now, read on, and get the “inside word”...

Deposit

To qualify for any home loan you must be able to provide a deposit. Many lenders will consider an applicant with a 3% deposit, although this is the minimum and only offered to clients who, from their perspective are considered to be a safe prospect. Generally 10% is expected for investment property finance. .

Other costs

In addition to the deposit, a home buyer will also need to be able to cover the other costs involved in purchasing a property, such as lenders mortgage insurance, government stamp duties and conveyancing fees. For the loan to proceed, - the insurer will need to approve the application and be willing to provide the lender with insurance.

Savings Pattern

With most mainstream lenders you also need to be able show a genuine savings pattern. This money has to have been earned by you and saved (not a gift or windfall). Lenders tell us that applicants with a higher disposable income are more likely to have their home loan approved. If your financial circumstances have changed and/or your pattern of savings has varied, I can speak with you about the appropriate options available to you.

Employment History

Your employment history will be considered when applying for a home loan. Casual, temporary or probational positions or a volatile work history may affect the outcome of your application. Maybe you work on contract or are self employed? If this sounds like you, it is more important that you speak with a mortgage broker and read on for more information.

The Property

Some lenders may ask for a property evaluation. The type of property, its condition and location may have to be evaluated for your application. Sales in the area may also be considered.

Credit Reference

The lender will conduct a credit check with a credit bureau such as BayCorp Advantage. Your credit history covers the last five years and shows any defaults, substantially late payments, outstanding debts and bankruptcy. This plays a major part in lenders deciding on the approval of the loan.

For further information please contact Mike Lloyd at mike@fusionfinance.com.au

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