Sure-fire ways to secure property finance

Interest Rates

There has been plenty of talk in recent times of banks being scrutinised to ensure they maintain their lending standards.

With interest rates low there is heavy competition in the mortgage lending market to provide finance for your loan, but if lending standards are maintained it still won’t be a walk in the park. It may look easy in their shiny and bright advertising campaigns as lenders fight to lure your business, but it’s still necessary to tick some boxes to gain finance.

Customers need to follow these sure-fire ways to boost their chances of successfully gaining finance. 

1. Equity

Equity is huge. If you own a property, or part of a property, using that as leverage to form a deposit for the asset you want to buy will make it much more likely to succeed. Otherwise you’ll need a standard deposit of 20 per cent to feel confident your loan application will get the tick of approval. 

2. Test your finances

Before applying for a loan, put your finances through a hypothetical stress test. Imagine that rates go up, or you lose some overtime shifts at work, or your partner stops working to have a baby. Would you be able to meet payment requirements in these instances? 

3. Income consistency 

While lenders don’t ask for as much proof of financial returns as they used to, they still will be looking for at least around a year’s proof of financial returns if you are self-employed. And a demonstrated consistency of income is gold, patchy employment records are unhelpful.

4. Interest-only loans 

These types of loans are generally easier to get than principal and interest loans. While they are easier to qualify for, you can end up out of pocket with interest-only loans if you buy a bad property. 

5. Beware special deals 

Banks know they are going to profit from your loan while house prices are rising. Watch carefully ‘free’ holidays or a bonus $1000 credit card – it isn’t free if you’re paying more interest than you need to be. 

6. Change jobs after the loan

Some lenders won’t approve a loan within three months of a customer starting a new job to ensure it’s steady. Aim to arrange your loan before you consider changing your job. 

7. Returning to work 

If you’ve just returned to the workforce after having children, lenders will again be looking for around a three month employment restriction before approving a loan, unless you are returning to the same or similar job with a previous employer. 

8. Mortgage brokers 

Mortgage brokers like us here at Perry Finance can take the hard work out of negotiating loans. 

9. Keep an open mind 

Consider all types of lenders, whether big or small, online banks, credit unions and building societies. Mortgage brokers such as us here at Perry Finance might be able to identify lenders who may be prepared to loosen criteria for your loan.


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