Are You Ready For a Loan Today?

Things have really changed quite a lot in the last twenty years, and the credit requirements of the past may not necessarily apply in today's home loan application.

Financial advice from your father may be dignified, but he may not be completely aware of how times have changed. One will need to be aware of what's really important in finance today!

It used to be certain that you needed a great credit character to secure a home loan from your local bank. Having great credit does make things a lot easier, but you can still get a loan despite your questionable credit history. Simply showing that you have been making an effort to gradually improve your credit rating may be enough to convince a lending institution to take a credit risk on you. However, you must make sure you haven't had any recent bad credit marks registered leading up to your mortgage submission.


Providing 20% or more as a deposit was the standard before a bank would even consider you for loan. These days' things have changed substantially. Many mortgages products and lenders will allow for anywhere up to 95% to 97% funding with very little deposit. It would be wise to try and save as much as you can though, as every little bit you can add to your deposit will reduce the amount of mortgage insurance premium that will be applicable and payable by you.

People will tell you that you need to have a credit card history to prove that you're a valid credit risk. This is also not true. You can prove your history of repayments with your utilities records, car payments, rent etc. In fact no credit card history is a lot better than a dubious one!

Banks used to put a strong value on ones employment stability. Showing years of consecutive employment with the same employer was always considered a pretty safe bet. However, these days things have changed a lot, and people are more short-lived in their occupational roles than ever before.

This doesn't mean that you're a credit risk; you may just have a great career track. Today's lending lenders are aware of the demands of today's workplaces, and will look at your continuous earning history and employment growth potential as being a lot more important.

There are some credit guidelines that haven't changed at all though. Banks can and will decline you or have risk loaded excessive interest rates if they think you're at risk to default, based on the evidence in the provided documents you present and of late, their own unique credit scoring scale.

Make sure that your recent history on any monthly commitments ( credit cards, personal loans etc) reflects disciplined payments, all on time and in full, whilst trying to save as much as you can for the deposit. There is nothing banks appreciate more than the security cushion of a reasonable deposit or current commitments conducted well.

So stop throwing your money on rent each month and start to build your campaign to secure a home loan. A perfect way to make sure that you are on the right track is by speaking with an industry accredited mortgage broker, and having a good look at your current financial situation together.

Remember, they want to help you successfully apply for your future loan, and showing a willingness to work with your broker will help your situation in securing that final Formal Approval!