In order for you to get home loan approval you need to meet lending criteria or a lender’s specific requirements. These requirements typically centre around how much you can afford to borrow and repay on a home loan over a specified time-frame. Let’s look at 5 of the most important lender requirements that you’ll need to meet to get your home loan approved.
1. Your Income – A lender will want to know how much you earn so that they can determine what you can afford to repay. Income includes your wage, child support, any government payments, and rental income or share and dividends payments.
2. Your Expenses – How much you spend on living and your other financial obligations plays a part in your ability to repay your home loan. A lender needs to establish that you can afford to repay a home loan without compromising your standard living.
3. Credit History – Your past financial history provides a lender with a record of your ability to meet your financial obligations. If you’re a reliable payer then you may be able to borrow more for a lower interest rate. Plus, a lender is more inclined to approve your loan as you represent less of a risk.
4. Your Deposit – The larger the deposit you have, the less you’ll have to borrow. This reduces a lender’s risk and makes them more likely to approve your home loan.
5. Assets – What you own in the way of assets, such as vehicles, investment property, boats, and shares, and how much you owe on these assets will influence a lender’s decision. The more you own and the less you owe, the less risk for a lender.
Are you looking to apply for a home loan? If so, then contact eChoice today.