Finding your perfect 'Mortgage Match'

Matthew King
Loan Processor

Improving your loan ‘dating’ profile - What are the red and green flags the banks look out for?

Finding your perfect 'Mortgage Match'

We all know the struggles of the dating world. The constant texting, the awkward back and forth small talk and the expensive date nights, often eventuating to not much and leaving you sitting at home thinking- What am I doing wrong?

Well, going through the loan application process can sometimes be just as hard. Luckily, much like a dating coach, Mortgage Brokers are professionals who are here to help you on this journey, by sifting through your financial “red” and “green” flags.

There are many flags to consider throughout the loan dating world, although here is a list of some of the most important that you will need to understand, to give yourself the opportunity to put your best foot forward, bringing you one step closer towards your dream loan match.

🚩 Missed Repayments on Existing Loans

All the bank wants, is the reassurance that you will be loyal and pay back your home loan. One of the ways in which they assess this is by looking at your previous repayment history and whether you have been able to keep up with your loan in a timely manner. Poor repayment history illustrates to the bank that you haven’t put the effort in with your previous banking ‘relationships’ and suggests a lack of care and faithfulness.

🚩 Defaults on Credit Cards & Personal Loans

The banks not only want to see that you can make repayments on your home loan, but also on all other liabilities. Defaults typically occur when you miss repayments over a longer period of time on credit cards or personal loans. The bank has the opinion “once a defaulter, always a defaulter” and a strong explanation is often needed when they occur.

🚩 Poor Transaction History

We all want someone who is wise with their money, and the banks are no different! So, whether it be daily Sportsbet deposits, the multiple ‘Buy Now, Pay Later’ purchases or suspicious cash withdrawals, the bank may assess each transaction and depending on the history, your application can be majorly impacted. Before submitting a loan, it is important to monitor your spending and only buy the necessities in the months prior.

Stable Income & Organised Financials

Consistent employment and a steady income demonstrate financial stability and the ability to meet loan obligations. By providing accurate and clear financial statements, we make life easy for the assessors looking at your applications which can often lead to faster and smoother turnaround times. Much like a relationship, stability is key, so always ensure your income is organised and up to date.

Strong Credit Score

A high credit score indicates a history of responsible financial behaviour, such as making timely payments and managing your credit responsibly. Borrowers with excellent credit scores are more likely to qualify for loans with lower interest rates and better terms- This is the bank basically rating you on a scale of attractiveness! The higher the score the higher your chances, which speaking from experience, can be a brutal wake up call…

Having said all of this, as Mortgage Brokers we understand you cannot always be perfect! We know that events come up in life which are outside of your control and can lead to some red flag occurring. Because of this, it is important that you disclose all information to your broker at the start of the process, this way we can help you on your journey and maybe even turn those red flags green.

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