Increasing the amount of money a bank will lend to you could mean the difference between borrowing enough money to buy a ‘fixer-upper’ or buying your dream home straight away. To help you increase the amount of money a bank will lend you follow these simple steps.
Have your PAYG income tax return up-to-date. Having you financials up-to-date is essential if you are self employed, in a partnership or are a director of a company.
- Credit Score
Changes to the Privacy Act from 12 March 2014, meant that knowing your credit score is more important now than it was previously. It’s possible your credit score isn’t as healthy as you thought but find what your credit score is for free here.
Reduce your credit card limits
If you have unused credit cards with limits that are more than you need, then cancel those cards or reduce the limits to limits more in line with what you need. Cancelling any other cards – such as department store cards – that give you credit will all help to increase the amount you are able to borrow from a lender. Don’t be mistaken, every $1000 on a credit limit (even if not spent) reduces the amount you can borrow for your home loan.
- Increase your deposit
Lenders look for consistent saving records, usually shown over six months or more. Saving more will reduce the amount you need to borrow and in reducing the amount you borrow from a lender you also open your options in relation to how much lenders are willing to lend you and give you more negotiating power in relation to the terms of the mortgage you finally receive.