As a first home buyer, you may not be aware of some of the questions you can get asked when you apply to a lending authority for a new home loan. We’ve put together the big 4 questions that the Urbane Homes Sales Consultants ask our customers to see if they’re financially fit to purchase a new home. The Urbane Homes Sales Consultant then refers you to a lending authority who can then accurately qualify you.
What’s your income?
In order to qualify for a home loan, the lender will want to know whether you’re capable of paying the loan back on time, every time. The first question you’ll be asked by your lender is your current employment status.
- Full time
- Part time
- Casual or
They’ll request you to provide your employer details, your position and tenure with the company and finally your salary/wage in the form of payslips or your employment agreement. Most lenders will acknowledge 12 months in a part-time position and 6 months in a full-time position. If you’ve changed jobs or industries frequently qualifying for a home loan may prove more difficult.
What’s your rental history?
The lender will ask for evidence of both your current and past housing situations. The lender will request your Property Managers details of the Real Estate Agent that you’re renting through and you’ll need to show a minimum of 12 months of rental history.
The lender uses your rental history to prove that you can pay on time or show that you have “forced savings.” Unfortunately, lenders don’t count renting privately from friends or family where there is no official records, such as a tenant agreement in place.
How much debt do you have?
The lender will delve deep into all of your current debt. It’s wise to be upfront with everything as every detail can assist you in being assessed on a larger loan amount.
- Boat or
- Personal loans
- Store cards or
- Credit cards
- The biggest one people always forget to mention is their university or TAFE debt
They’ll ask you for the lender details, interest rate, limit, current balance and your repayment method and whether or not you pay the minimum or add a little extra every time. In some cases you may have to pay off the debt you have before you can qualify for an ideal loan amount.
How much in savings do you have?
What is and isn’t considered to be genuine savings is very complicated and in addition to this, each lender has their own genuine savings policies. The following types of savings are considered to be genuine savings if they add up to be more than 5% of the purchase price:
- Savings held or accumulated over 3 months
- Term deposits held for 3 months and
- Shares or managed funds held for 3 months
A few select lenders will request a 6 months saving history instead of the normal 3 months required by other lenders. This determines which customers have received a deposit from another source and simply added to it over 3 month period.