HAVING difficulty getting a loan for your home or investment property?<\/p>\n
Well, you\u2019re in good company according to Australia\u2019s most published property author Michael Yardney, who says that there are many others in the same boat with the banks more carefully scrutinised your expenses.<\/p>\n
Michael\u2019s recent chat with building companies revealed that even your dinner choice could have an impact on your future lending potential, which was highlighted by Craig Gemmill, Managing Director of Gemmill Homes.<\/p>\n
Personal spending habits on things like clothes, holidays and take away food are becoming a factor when a bank considers a loan application.<\/p>\n
\u201cIncreased scrutiny into the banking industry and tighter controls on lending obtaining finance is becoming an issue for prospective home owners,\u201d Mr Gemmill said.<\/p>\n
\u201cThe banks are still lending money, but it\u2019s much tighter, it\u2019s across the board, it\u2019s first, second and third home buyers, these people can\u2019t get the funds.<\/p>\n
\u201cIn the past banks would work out a multiple of your income, less your big stuff like car debts and exposure to credit cards.<\/p>\n
\u201cNow, they\u2019re looking at your bank statements to see how often you have takeaway food.\u201d<\/p>\n
\u201cAPRA want increased security on the amount the banks are lending to home owners, so the balance has shifted.<\/p>\n
\u201cThe banks haven\u2019t changed their guidelines, but they are just applying them far more stringently now.\u201d<\/p>\n
Despite this though, Gemmill says Australians can ensure they do not run into credit problems, by following simple rules.<\/p>\n
Being prepared before applying for a loan and making easy changes to their lifestyle in the months preceding a credit application can make all the difference.<\/p>\n
\u201cThe most practical advice we can give, is make sure you are organised before you apply. \u201cUnderstand that everything you do is going to come under more scrutiny,\u201d Mr Gemmill explained.<\/p>\n
\u201cIt\u2019s not just a simple process anymore, technology has been a real game changer.<\/p>\n
\u201cPeople are using less cash, so everything can be tracked when you use your cards.<\/p>\n
\u201cMake an informed decision before you buy, knowing that someone is watching you.\u201d<\/p>\n
\u2022 Be Organised<\/strong> \u2013 go to the bank with as much information as possible, include expenditures, discretionary income, school fees and other costs.<\/p>\n \u2022 Minimise your expenses<\/strong> \u2013 Once issues are discovered in a credit application it is difficult to overcome them. Work on minimising unnecessary spending in the months prior to applying, less Uber Eats could have a significant impact on your chances of approval.<\/p>\n