Loan Market’s State Director Andrew Thompson provides insights into how to keep your financial fitness high, ahead of applying for property finance.
Talk to a broker
It’s recommended you talk to your broker as early as possible. Loan Market brokers are trained to understand the requirements of banks and how these apply to a multitude of individual circumstances and have access to the largest lender panel of any broker group.
Credit report
Having a copy of your credit report is highly recommended. Credit reporting has changed significantly since the introduction of Comprehensive Credit Reporting (CCR) mid-way through last year. Your Loan Market broker has the experience to navigate the options for your unique circumstances and a broad panel of lenders to select from. You can download your report for free or talk to your broker to help arrange this.
Savings history
Lenders will want to ensure that you’re not only able to pay your loan back, but will look for evidence you can live within your means and save a little before you commit to a large purchase such as a new home.
Your savings history could be in the form of accumulated deposits over time, a larger deposit that has been in your account for over three months, or in some cases, your rental repayment records over the past six months. Different lenders have different criteria on how they assess savings so it’s important to talk to your broker early about how they will view your unique circumstances.
Consolidation
This is usually overlooked, but a great way to save on fees and charges is to roll all of your accounts into one. Not only does this save you money in the long run, but it also allows you a single view of your spending and expenses.
Budget
Write a budget. And stick to it.
This is the most crucial step when taking on property finance.
Be realistic about your expenditure and build in contingencies.
Also consider indulgent purchases, holidays, and ensure you allocate a suitable amount for living expenses. Lenders like to see people living within their means.
