- In Bee Savvy - Getting the most out of your loan, First things first - Steps before applying for finance
Lenders are becoming increasingly strict when it comes to approving home loans. One particular area we are seeing a major crackdown, is on spending habits.
How lenders assess spending habits
Until recently, lenders were mostly concerned with your income, and your current debts i.e. credit cards, car loans and personal loans etc. However, now lenders are looking at borrowers spending in greater detail.
When you apply for a home loan, lenders will go over your bank and credit card statement with a sharp eye, to see exactly how you spend your money. And they aren’t just looking for the big expenses. It’s not uncommon for lenders to scrutinise Netflix subscriptions, take away orders and weekends away.
Once, these were seen as optional expenses, and lenders would take into account that you could stop spending this money, if needed, when you started repaying your home loan. But now, these simple, often small expenses, can be enough for a lender to decline your home loan.
Making sure your spending habits won’t cause problems for your home loan application
Luckily, there are steps you can take to avoid your spending habits causing problems when you apply for a home
loan. The best thing is to exercise good spending habits for a number of months before you apply.
If you are looking at applying for a home loan in the near future, get in touch with Bee Finance Savvy. Our broker Desiree is here to help you work out what you can do to make your spending habits more acceptable to lenders. A few simple changes can help drastically improve your chances of approval.
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