When it comes to taking out a mortgage, a lot needs to be taken into consideration. And that depends upon the type of loan you are planning to take. However, all said and done, there are certain fundamental lending rules that come into play regardless of the type of loan you take.
Thus, let us discuss on this page, those basic rules that apply.
Employment: Preferably, individuals applying for home loans in Toowoomba should be employed in their present job for a minimum period of 6 months. In case of contractual and casual employees, that period may vary for 12 months or more. However, for self-employed or in other words, doing business, the period is 2 years, generally. However, there are always exceptions to these rules.
Credit History: This is the most important factor that will influence your ability to avail of any financial assistance from any quarter. Indeed, lenders take into account the issue of credit history very seriously. They take a very hard look at your credit file before approving loans. When people have a bad credit history, most of the lenders would refuse approving loans over 80% Loan to Value Ratio (LVR).
The size of deposit: The larger is the size of the deposit, the lower is the risk the lender has to take. Thus, lenders would consider loans for 80% of property value to be ‘safe’. It is for this reason, the lenders are more likely to make an exception to their usual lending policy when you have a larger amount of deposit and need 80% to borrow. If the borrow amount exceeds 80%, then the lender is likely to charge you a one-off fee that is termed as Lenders Mortgage Insurance (LMI). Besides, they will show no leniency while assessing your loan.
Genuine Savings you have got: The majority of lenders would like you to have genuine savings in one form or the other. They know that individuals who can save or have saved over 5% of they know that individuals who can save or have saved over 5% of the total purchase price in the savings account are more likely to pay back the loan than those without any savings.
The Type of Property: Lenders are also very skeptical and conservative at times when it comes to preferring and ranking financial properties. They would like to see a property as ‘normal’ as possible. This means construction loans in Toowoomba have higher possibility of approval if you are taking it to purchase a home or unit over 50 square meter internal area (excluding the car space and the balconies). Again, if you are planning to purchase any commercial property, then commercial loan rules will apply.
Payment History: In case you are not making the payments for your credit card, rent or your existing loans on time, you are not likely to face trouble in getting the loans. Lenders do not like those who skip repayments. Thus, you need to be very particular about the payments that are due, to ensure you do not draw the wrath of your creditor.
Thus, be it looking for a commercial mortgage broker in Toowoomba, or a creditor for a personal loan, you need to abide by these fundamental rules. For further details, call Unlocked Finance Pty Ltd at 1800 286 562.