One of the main things the lender is considering is your past credit history. If you have applied for any credit such as credit card, personal loan, car loan, and phone/ internet contract, a trail is left in your credit file even though the application is not successful. If there are frequent enquiries in the credit file, your credit score drops. The lender will want to check the cause behind those enquiries further. Therefore, it is essential to understand what is in your credit file and prepare yourself with the reasons.

When you have taken multiple loans or credit cards, your ability to pay your home loan is affected. These loans will reduce your borrowing capacity, and you will not be able to purchase the home in your dream. Many Australians have credit card limits higher than their needs. The lender looks at the overall limit when assessing your home loan application even you have not maxed out the credit card. You may consider closing down unused credit cards, consolidate credit debts and personal loans into one single loan and reduce the credit card limits.

The next crucial factor is your deposit history. Your savings habits and a safety net if things go wrong. Regular saving is a positive indicator that you have good savings habit and your ability to make monthly home loans repayments.

Further, you have to make sure you have met all your payment obligations. This include transaction accounts, credit cards and bills with no missed payments or overdrawn fees. The lender will want to look at your transaction account history, credit card statements. If you are self-employed, you should ensure that taxes obligations are met.

In order to improve your borrowing capacity and submit a compelling loan application, please feel free to get in touch with us. Being a Mortgage Broker, we could give you the advice and information which is essential about your credit history, credits, prevalent loans and its impact on your ability to borrow for your home. This approach will help you have enough time to prepare yourself if it is necessary.

Please speak to us to get the best rates, free advice, and a clear path to your dream home. – Click here for an obligation free advice.