The lender is asking for WHAT…. ?
Long gone are the days where you give the lender a Group Certificate, sign a declaration to say you can afford the loan and walk out with half a million dollars. With the amount of documentation you need to provide to a lender these days, you’d be forgiven for thinking there’s a crime investigation happening and you’re the main suspect.
Don’t worry too much though. We’re sitting right beside you and will share everything we know to help you walk away unscathed with the half mill.
To start with, here are some things you can to prepare for the application process.
Accept that things have changed
The first step is to accept that things have changed. We know it’ may be frustrating, seem over the top or just-plain ridiculous, but we’re in an interesting time. Lenders want to prove to the regulators they’re serious about lending responsibly, so they’re doing EVERYTHING within their power to qualify you as an acceptable candidate.
It might be checking your credit history.
It might be running a credit enquiry report.
It might be going through six months of bank statements, line by line.
We’ll always put up a defence to the lender if we feel their request for additional information is going too far – especially where the information requested can be verified with documentation already held #commonsenseapproach
In some cases though, if you want the lender to approve your loan, we may just need to comply with certain requests.
Look ahead and plan accordingly
If you know you’re likely to apply for a loan later in the year, start preparing now.
This means making sure you’re meeting all your existing commitments. We know you’re doing this already(!) but take extra care to ensure all your bills are paid before the due date and none of your loans go into arrears (even for a day).
If you’re renting and sharing bills with housemates, if it’s your name on the electricity bill YOU need to ensure it’s paid – regardless of who’s “turn it is” to transfer the payment this quarter. A blemish on your credit history – even if it’s not your fault – can delay your first house purchase.
You also need to consider the impact of new debt commitments – like leasing a new vehicle, for example. Because in today’s lending climate, taking out a new car lease or going down to 3 days work/ week can affect your future ability to borrow. It’s also worth mentioning that if a lender has Pre-Approved you for a purchase, this Pre-Approval is based on the details submitted with your Pre-Approval application. If you take on additional commitments or change jobs after this Pre-Approval comes through, you may no longer qualify for the finance.
Please talk to us BEFORE you make a decision that affects your future borrowing ability – that’s what we’re here for!
Prove to yourself you can make the loan repayments
When applying for a loan, you’re trying to prove to the lender you’re a worthy candidate. In other words, your employment is stable, you’re sensible with money, you’ll use the cash for a worthwhile cause AND you can afford to pay it back over time.
So, can you make the repayments? How about you prove it!?
In the months preceding your application, see if you can set aside the monthly repayment and build up your cash savings. It will give you piece of mind that you can afford the loan you’re applying for AND show the lender you’re responsible with money.
Reviewing your monthly in-comings and outgoings is a good exercise to do regularly anyway, even if you’re not planning on applying for a loan anytime soon.
It helps you uncover where money may be going (i.e. subscriptions you’d forgotten about, memberships you no longer use) and can quickly uncover ways to reduce your monthly expenditure.
Whilst you can guarantee we’ll present and package up your application to give it the best chance of being approved, you need to do your part too.
Know a lender is going to review your financial situation with a fine tooth comb can be a good motivator to improve your money habits.
You want to make sure you know exactly where your money is going, so there’ll be no need for anyone to plead the Fifth.
