How do I qualify for a loan
How do I qualify for a home loan?
While lending is a fast pace, rapidly changing world with new policies and products released constantly the basics remain the same, lenders are looking for character, capacity and collateral.
Your lender is looking for a good credit history, in Australia we are moving from a “negative reporting” regime, where you are reported for negative behavior only – to a regime where positive repayment history is also reported, and negative behavior in far greater detail. What does this mean? Where previously you would only be reported for a missed payment of 60 days or more, lenders are becoming able to report a payment which is paid just a few days late. (So move everything to direct debit!) They are also able to report positive behavior which is good news if you need a fresh start.
Lenders are also looking for a stable employment and home address history, and a list of assets which is both greater than your current liabilities, and is reasonable for a person of your age and with your income.
Quite simply, can you afford the proposed loan? In this we are looking at your income and liabilities & other commitments, but also your savings history. If it looks like you have no spare income at the end of the month then can you really afford a new commitment? Perhaps you are willing to make sacrifices for a goal - I can’t tell you how many times I hear “we’ve been living life, enjoying ourselves, but now it’s time to get serious”. If this is your light bulb moment I applaud you for taking action.