Tips to getting the YES with your lender!
Updated: Jan 11
The bigger the deposit you have, the better your chances – especially if your deposit is 20% or greater! Don't be discouraged if you don't have the 20% deposit in cash! There are other deposit options to help you make this deposit up... Check to see if some these options are an option for you... Kiwisaver, Kiwisaver first home buyers subsidy, First Home Housing NZ, New Zealand Housing Foundation, Equity Loans, Gifting from family.
The bank will check your credit history - Its recommended that if you have any outstanding debt that you pay them before you submit your application to the bank, if possible. Any unpaid debt will require an explanation.
Try to pay off any debts - The less debt you have the better your chances! The more debt you have the less you will able to borrow.
Credit cards - If you pay off the full balance of your credit card each month – the bank will not allocate a portion of your income to service the credit card. If you only pay the minimum or less than the full amount owing, the banks will allocate 2-3% per month of your credit card LIMIT (not the balance) to service the debt.
While assessing a loan application, the bank usually looks at the last 3 months statements of your bank account. They are looking at how well you manage your account. Any dishonours, and or unauthorised overdrafts. The better your account looks the better your chances! Its recommended to keep a close eye on those accounts and that you get a small overdraft limit, if you need too – just in case! That way it keeps the bank happy and saves you on high interest and honour fees!
Banks will review your income versus your expenses. The bigger the surplus the better!
Banks will look at your employment, the longer you have been in your current position the better. Otherwise ideally banks like to you be in your current position for at least 3 months before applying for a home loan.
Banks will look at your savings history – if you can show regular and ongoing savings history, this will help prove that you are able to manage on your income and have capacity to save.
Fingers Crossed! Hope these tips have been helpful to you, good luck with getting pre-approved for your home loan! Don't forget to join my database (you can do this easily online through the 'Subscribe' tab or click the button below) so I can let you know when a property comes up that may be in reach for you! - Kimberley 0508 SELL DUNEDIN