7 Tips for Getting a Mortgage in 2019

If you’ve seen the news recently you’ll likely know about the current state of the lending industry. Following the Royal Commission, lending rules have been tightened severely and banks are more cautious about lending than ever before.

Home Mortgage - 7 Tips for Getting a Mortgage in 2019

If you’re looking for a few tips to improve your chances of getting a mortgage then we have a great list for you. Take a look below at tips for getting a mortgage in 2019.

Rein in Non-essential Spending

Up first is getting a good grasp of your spending. There is a suite of new lending rules that the government has set in place that require lenders to look deeply into applicant expenses. That said, banks now assess anything from medical expenses, childcare, takeout meals and even alcohol and gambling.

Our biggest tip here is to cut back on all non-essential spending for the time being and build up your savings and expense ‘maturity’ level. An example of expenses that are almost certainly going to block you from having your mortgage application approved are Sportsbet, Lotto and even Dan Murphys and even Uber Eats.

Cutting these expenses will ensure lenders can better grasp the type of person you are with your money, which in turn will improve your chances of getting a mortgage in 2019.

Credit Card Control

If lenders notice high credit card debt for mortgage applicants, they’re less likely to approve an application of any size. This is down to the fact that you’re immediately seen as higher risk and more likely to default on your loan because of high credit card reliance.

On top of credit card debt, high credit limits and using a number of credit cards is also going to take a toll on your application. Either contact your bank or head over to an online portal where you can reduce your credit card limit and you’ll notice that your chances of approval are much higher.

Late Payments are a No-no

When it comes to bills, you must make it a priority to have a great track record of paying in full and on time. If you have a mortgage application being processed and you forget bills or don’t have the money to pay for them, then your likelihood of approval isn’t looking good.

One thing many people don’t realise is that even they have money in the bank, and just forget to pay the bill, it still reflects badly on them.

We suggest setting up payment reminders in your phone’s reminder app as well as cancelling any subscriptions to services you no longer use. This way you’re less likely to miss a payment or not have the funds to pay a bill.

Make Saving Your New Past Time

Yet again, stricter lending laws come into play in this tip. You need to show your potential lender that you’re able to make the payments on the loan they’re considering approving. If you’re outspending the future loan’s repayment amount, you’re going to be rejected.

A rule of thumb here is showing you can afford the payment by using your rent and savings account as proof. If your future loan repayments are expected to be $2000 a month, and you’re currently paying $1500 a month in rent, then save the additional $500. This way lenders can immediately see you’re able to afford the mortgage.

Have a Deposit Amount Ready

Another way to show lenders that you’re a low-risk borrower and increase the chances of your application being approved is by saving like crazy for a deposit. Essentially, the larger your deposit on the mortgage, the lower risk you are.

Additionally, a large deposit will mean your repayments are going to be lower since you’ll have paid off a large chunk of the house already. This is a great way to cancel out the negatives from higher spending or late bill payments.

For some extra information on determining your deposit amount and finding out an ideal deposit amount, take a look at St. George bank’s deposit tips.

Only Apply After You Have a Stable Job

If you’re in-between jobs at the moment or have jumped between a jobs in the last few months, it’s best to wait until you’re in a stable role before applying for a home loan. It’s generally suggested waiting for at least three months before applying for a home loan as you’ll struggle to get approval if you just moved jobs.

However, if you’ve been moving rapidly upward to better-paying jobs in the months leading up to your mortgage application, that won’t likely be seen as a negative by lenders.

Streamline Expenses Three Months in Advance

One final tip to getting a mortgage in 2019 is having all of your expenses under control three months before your application. In doing this, your lender will be able to see that not only can you afford the loan, but also your current lifestyle too.

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