How is my application assessed?
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Each lender will have their own method of assessing a loan application. The criteria that determines whether your application is approved will vary, but generally the lender will assess the following criteria.
The lender will look at your employment and income compared to your expenses to calculate whether you can afford repayments over the life of the loan.
The amount required to contribute to the purchase will vary between certain lenders. Some will approve a 5% deposit while others may require more. Your deposit will also determine whether lender’s mortgage insurance (LMI) will be charged. The closer you have to a 20% deposit, the less LMI you will have to pay. Depending on your type of employment, you may qualify for no LMI with less of a deposit.
The bank will conduct a valuation of the property being used as collateral. This is to minimise the risk if you are unable to repay the loan. The property valuation report will determine whether the loan is worth being approved.
The lender will look at your expenses, debts and credit history to determine whether you are reliable as a borrower. The lender will want to ensure you are responsible with your debts to ensure you are capable of repaying the home loan.
Current conditions of the economy may influence the lending criteria of the lender. Your mortgage broker will address any conditions that will impact your application.
The information provided on this website is for general education purposes only and is not intended to constitute specialist or personal advice. This website has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should consider the appropriateness of the advice to your own situation and needs before taking any action. It should not be relied upon for the purposes of entering into any legal or financial commitments. Specific investment advice should be obtained from a suitably qualified professional before adopting any investment strategy.