Securing a loan is one of the first and most important steps on the way to buying your dream home. However, before you take that step you have to have your ducks in a row to ensure that you application is approved.
What ducks are we talking about? Read on for three things you must sort before applying for a home loan.
1. Your credit score
Your credit history is a record of all credit or loans you've applied for, your repayment history, as well as other details like bankruptcies, court judgments, and personal insolvency agreements, even old power and mobile phone bills. All of this information is used to rank you on a scale from 0 to 1200 – 0 being a terrible score and 1200 being a perfect score.
Your lender will look at your score when assessing you as a borrower, and if they don't like what they see they may decline your application. Check yours before you apply for a loan with a credit rating agency like Veda, and you'll avoid any unfortunate mishaps.
If you do find that your credit score is a little worse for wear, there are ways to work with this with the help of an experienced mortgage advisor.
2. Pay down debt
Your debt will show up on your credit report and if you've got a number of frivolous and/or large debts outstanding lenders are very likely to decline your application. Slipping behind on repayments will also show up as a red flag.
Before you apply for your loan pay down your debts as much as possible and catch up on repayments. A consolidation loan could help you do this by rolling all of your debts into one, and making repayments easier to manage.
3. Job hopping
Australians stay in each job for around 3.4 years, according to Mccrindle Research.
Australians stay in each job for around 3.4 years, according to McCrindle Research. Under 25s on the other hand, average under two years, and many restless Australians will also find themselves job hopping every year or so.
While this may help keep your work life fresh, it's not going to help when it comes to your home loan application. Lenders generally prefer that you've stayed in your job for over two years and are steadily earning more year by year.
This means that if you're thinking about buying a home soon, it's best to stay put at your job until after the purchase!
For more advice on applying for a loan, and to solve any problems you may have financing your dream home, get in touch with the team at Advantage Finance. We specialise in tailoring a loan to your needs, no matter what they are.