For applicants over 45 years, lenders are now seeking written advice of how the borrower intends to clear the debt on or prior to retirement. Banks do not consider relying solely on superannuation to clear the loan while leaving a little balance in super as a valid exit strategy. You need other avenues to strengthen the payback proposal.
Here are some steps that can assist in your loan application :
- Prepare a detailed list of current living expenses (Paul can email a form to you to help you cover the bases)
- Prepare a budget including a loan repayment at 7.25% (remember to factor in new expenses such as council rates,home and contents insurance, and allow for any repairs and maintenance)
- Ensure all your credit cards and store accounts are paid up to date. Lenders look closely at the last 3 months ofcredit cards and store accounts to ensure that there are no arrears.
- Cancel unused Credit Cards
- Ensure that all financial accounts i.e. tax returns have been completed and lodged and paid up to date if need be.
- Obtain a Credit Report or your finance broker can arrange one. This will enable a review of your current positionespecially as lenders will do their own report too. Occasionally a utility provider or telco may have recorded a default. Therefore, it is best to address any issues prior to submitting a loan application.
Talk to Paul today if you need more information about your home loan application.