Applying for a home loan is not as simple as filling out an application and hoping for the best. Borrowers must first be able to prove their ability to pay back their loan.
Perth, WA (PRWEB) May 23, 2013
The latest figures from the Australian Property Monitor (APM) are encouraging.
National housing prices rose by 1.7 percent in the first quarter. Melbourne, Sydney, Perth and Darwin recorded significant increases since prices began falling just a few years prior.
The outlook remains optimistic as the trend is expected to continue throughout the year.
Even lending for the construction and purchase of new homes have significantly increased according to data from the Australian Bureau of Statistics. A combination of low interest rates and rising confidence are partly responsible for this growth.
But lenders are not in a position to qualify anyone who applies for a mortgage. Applying for a home loan is not as simple as filling out an application and hoping for the best. Borrowers must first be able to prove their ability to pay back their loan.
Otherwise their mortgage application will be met with rejection.
Credit scores have become increasingly important as an indicator of creditworthiness and to determine loan conditions. First time home buyers can benefit tremendously by taking the time to improve their credit with the following tips.
Obtain credit reports
Potential borrowers with a solid credit history have better chances of getting a mortgage application approved. And they do this by looking through credit reports, bank statements, existing debt and employment status in detail.
Checking credit reports prior to submitting an application is absolutely crucial. Lenders look at these reports before qualifying a home loan.
Dispute Questionable Information
Errors on credit reports are common. But they also affect credit scores and could even lead to higher interest rates or a rejected application. Questionable information must be disputed and removed immediately before further damage can incur.
The process can be time consuming but it could easily mean the difference between favorable rates and poor terms.
Potential borrowers with a significant amount of debt relative to their income have a poor chance of getting their applications approved. The reason is they are seen as risky investments particularly if there is a delinquent history of late payments.
And taking on a mortgage ultimately adds even more debt. Lenders are especially wary of borrowers who struggle to meet their financial obligations. All credit cards and outstanding debt should be reduced as much as possible.
Likewise every effort should be made to not incur any new debt including credit cards or car payments.
Establish Payment Habits
First time home buyers are encouraged to establish a solid history of timely payments before applying for a mortgage. Even one late payment can be enough for lenders to reconsider an application. But regularly making payments on time proves financial responsibility to lenders.
Credit scores are absolutely crucial for mortgage applications. Making every effort to improve them takes time but pays off in the end.
About Aveling Homes
Aveling Homes are award winning luxury home builders in Perth WA dedicated to providing exceptional service. Find out more about our display homes and our house and land packages by contacting one of our representatives today.
Visit the Aveling Homes website at http://avelinghomes.com.au for more details about our services and available financing options for first time home buyers.
Aveling Homes Contact Information
24/7 Metro Sales: (08) 6144 1000
24/7 Sth West Sales: 6144 1001
South West: southwest(at)avelinghomes(dot)com(dot)au