How will a lender assess my application?
The five qualities
For lenders to decide whether to provide you with a loan or not, they will generally assess you against five qualities.
- Your ability to repay the loan
To establish your borrowing capacity the lender will look at your employment history and salary to evaluate whether you have enough cash coming in reliably to pay the loan over time.
- How much cash you have up front
Assessing your ability to put down a percentage of the value of the property being purchased up front is standard. The percentages vary though, and specialist lenders may approve a five per cent deposit.
- The property appraisal price
Since the property is used as collateral if you are unable to repay the loan, the lender will value the property. Based on the report, the lender will decide whether the property is worth the loan being approved.
- Your financial history
Your credit rating, expenses and debts will help the lender assess your character as a borrower and if they are comfortable with lending to you or not.
- Market conditions
Economic circumstances in the market can influence what interest rate you have access to and whether you need to provide extra security. They can also influence the repayment schedule.
The mortgage broker advantage
As a mortgage broker with access to 25 lenders my job is match you to the right products, which is why half of borrowers today turn to mortgage brokers when it comes to finding a home loan.
Contact a Resolve Finance broker to learn more about your loan application journey.