The lenders’ interest boils down to one thing: they want to make sure you’re capable of paying the money you borrow. One of the easiest ways for them to determine this is by checking out your savings history. They see your savings as another way to get the money back, and allows them to see how responsible you are financially.
This alone is a two-step process. Firstly, cut down on your current debts by paying them off before applying for home loans. Outstanding debt, whether in credit or personal, should be settled as to ease the stress of having to pay a mortgage.
How else are you going to pay your mortgage if you don’t have a job? Aside from your credit history, you can count on lenders to take interest in your employment history. Lenders want to know that you’re in a stable position; or at least, stable enough that you won’t have problems meeting repayments.
Sometimes lenders just want a safety net, and the easiest answer to this is finding a guarantor. A guarantor is a person who legally supports your loan application by securing it against their own assets, which is typically a home.
What better way to convince lenders than to show how much of a responsible borrower you are? Proof of consistent repayments is the ultimate way to win a lender’s heart. Repayment histories have more leverage if they have already been completed in full.
Although it’s wise to compare several lenders and expand your choices, it’s unwise to submit applications to each and every one of them. Too many people make the mistake of thinking applications have no impact on their credit report. In reality, every application you make appears as an inquiry, which can have a poor and inaccurate reflection of your financial status.
Lenders don’t care if you’re tidy or compassionate or hard-working. The one thing they’ll be looking at is your ability to make repayments, which is more or less summarised by your credit report.
Before applying for home loans, check your credit report so to prepare yourself for the lender’s inquiries. It’s important to make sure that all information is accurate to keep your reputation good with the lenders.
