If you are looking for a home loan in the Perth market, pay close attention to this post. The better you get your finances in shape, the better terms and lower interest rate you will get on your home loan. Here’s what to do if you want the best possible results on your home loan.
View Your Credit Report
We could spend an entire post on credit report criteria, but we won’t. The bottom line is that credit reporting agencies take your entire financial situation into consideration and then assign you a number that indicates the likelihood that you will be able to pay your loan back.
It is essential that you know what is on your report for two reasons. First, you want to know it is accurate. Second, it tells you where you stand and what you need to “clean up.” There are three things you should check: personal details, credit queries and defaults or judgments.
Close any Credit Card You Aren’t Using
When a lender looks at your credit report, he always assumes that any credit card you have is maxed and subtracts the monthly payment from your projected monthly assets. One $5,000 credit card limit can subtract $21,000 from your projected loan capacity.
No Credit Applications
Don’t apply for any credit within a year of applying for a home loan. There isn’t a sensible reason: lenders just don’t like it.
Don’t Change Your Job or Residence
If you change your job or residence too frequently, lenders see you as a higher risk to default on your loan. You must have at least six months on a job or two years of documentation if you are self-employed.
Don’t Borrow Too Much
If you make $80,000 a year, a lender will loan you $505,000 with a monthly repayment of $2,711. After tax, you would be taking home $5,104 each month. That means 53% of your total take home pay is going towards your home loan repayments. Don’t borrow the max.
Start Saving for Your Deposit Now
Lenders want to see regular deposits into a savings account.
Call Purely Finance Today
To learn more, call us today: (08) 9453 8888.