Preparing to buy property

Posted on: 12.07.2016

So, you’ve checked out a few loan calculators, saved your deposit accordingly and you’re preparing to buy property.

There’s a few things we feel you should know for the 12 month period leading up to your purchase. These are all suggestions and guides that will make your property purchase a whole lot smoother and easier.

In the 12 months leading up to your purchase

• Don’t take out any new loans, including interest free credit cards. The bank goes off the limit rather than the repayment or interest amount which can hinder your borrowing capacity.
• Try establish all of your savings in a single account in your own name.
• Banks look favorably at consistent, re-occurring weekly or fortnightly savings deposits as opposed to big savings deposits scattered randomly.
• Try to keep the same job or at least remain in the same industry. Banks prefer a stable employment history.
• If you are going to ask for a pay rise, do so as early as possible so that the bank can see a longer history of higher pay.
• Full time or permanent part time employment is far more favorable than casual.
• Be aware that if you are enquiring with lenders for credit/store cards, personal loans or car loans even if you don’t proceed the bank will perform a credit enquiry on your credit file that leaves a note of inquest. Lenders like to see a clean credit history that doesn’t look too busy in the time leading up to your application for home loan finance.
• If you’re self employed, try not to change your company structure within a minimum time-frame of 12 months prior to going for a home loan. The bank generally wants to see 2 years’ worth of financials and will usually take the average net profit. Also remember that the more deductions you claim, the lower your net profit, therefore the lower your borrowing capacity will be.

Summary

We hope that these guidelines and tips will help make the home loan process easier for you. Also, whether it’s Uprosper you organize the home loan through or not, it is just as important to seek out an experienced mortgage broker that explains home loan structuring. This is vital to optimize savings and keep more of your hard earn’t money in your pocket, not the banks.

To request to be contacted by Kirsty Gray, Uprospers’ leading broker. Click here and fill in the contact form for a free, friendly chat via email or phone at a time that suits you best.