Have you decided it’s time you set yourself up and purchase your dream home? If so, there are many factors that you are now having to consider like the color of walls to getting scam-free flood check hoses but most importantly getting approved for a loan is the most important step you will face.
Many Australians struggle to get approval because they haven’t done their research of what is needed for the application. These factors can affect your application for a loan, including poor credit scores, high debt level or maybe even your lifestyle expenses that exceed your overall income.
After all, your home will be one of the biggest assets you will own so it’s important you take all necessary steps to secure property valuations in Melbourne as a prospective home buyer to get approved and get you one step closer to your dream home.
Credit Score
No matter where you go for your home loan, many lenders are hesitant to give out loans without having the proper knowledge and understanding of your financial history. In many of the major Australian cities the median house prices averages $1m, it all comes down to the banks asking the question, will you be able to afford the monthly repayments?
Having a credit score/report completed will give lenders a look into your financial capabilities and this will help determine the best interest rates available for the mortgage loan and whether or not they will be approved or declined in your application.
There are various providers that are able to complete your credit score for you, make sure you check each site as there are costs involved to access this information with details in the reports that will include: outstanding debts, and missed payments.
Outstanding Debts
If you have debt already this can be a challenge to get a home loan approval. It’s easy, the less debt you have, the better chances the banks or lenders will approve your application. Before you consider applying for a home loan try paying off any outstanding debts on time so you don’t incur any further expenses.
Having a high credit card debt can have a major impact which will reduce your borrowing capacity. If possible, try paying off all debt, reduce or cancel credit cards. This will help increase the limit you can borrow from the bank for your home loan.
Lifestyle Expenses
Your credit card generally is the reason for encouraging you to spend on things that are not necessary. Some lenders will be extra cautious and look at your lifestyle expenses which will also impact the amount you can borrow.
Take note of your spending and gradually cut away any unnecessary expenses to help decrease the amount spent which will also help you save.
Increase your savings potential
Whether you have been working for a couple years and haven’t had any financial hardships or life changes to affect your expenses, this will give you a higher chance in an approved finance application.
Simply put, by having the required documentation to provide the amount of income you receive versus what’s going out (expenses). It’s important you can provide evidence of an ongoing employment and the ability to have a steady income to be able to afford to pay off the repayments.
Mortgage Broker
Buying a property is a significant decision for any person and will have long term financial implications. Speaking with a professional will help give you a clear understanding of what you can do to get on the right track to your mortgage loan approval.
A good mortgage broker will have access to multiple lenders that will advise you on exactly where your finances need to be to get the best loan outcome you require.
Another option if you have found your dream home and require more information on the property to give you a clear direction of the true value of the property, external factors, and the market conditions, is by enquiring for a property valuation.
A property valuation is an investigation into the subject property, you will receive a comprehensive report that will detail the true value of the property, data analysis of the market conditions and previous sales history within the area as well as any external factors that played a role in the calculation of the value.
By having a property valuation report completed you will have an upper hand when it comes time for your loan application as well as a means of negotiating the price of the property, as the valuation report is a legally binding document, any homeowner is encouraged to get a valuation completed prior to any decisions that may affect your future investment and financial stability.
As we mentioned, your home will be the biggest asset you will own, you want to make sure you have a clear understanding of what you are stepping into for the future.
Author Bio
John Anderson is one of Melbourne’s leading experts in commercial and residential property valuation services. John is a registered Chartered Surveyor and Senior Property Valuer with over 20 years of professional experience providing property valuations across Melbourne and Victoria. His in depth expertise in real estate and property has allowed him to share his specialised knowledge as an authority keynote speaker at conferences and universities across Melbourne.
