8 Factors That Can Affect Your Home Loan Eligibility
Need to buy a house in Australia? Well, buying a house is a major step in life. When it comes to buying the house, the first thing comes in mind is that how to arrange the finances. A great deal of money is involved in almost every new personal or professional phase of life. Among numerous ways of funding options, home loan in Australia is considered as the best, quick, and efficient way to get cash access to buy home.
Most of the financial institutions and lenders disburse the home loan against the property. The property owners will remain with the borrower while the property will serve as the security for the lenders and financial institutions.
To get the approval of home loan in Australia, you need to fulfill certain eligibility criteria including –
- Proof of Regular Income
Applicants have to prove their valid regular source of income that will ensure that you can easily pay the monthly repayments without any disruption.
- Borrower’s Age
Lenders consider the age of the borrower as an important factor. The borrower who have reached the age of retirement or almost there can face the problem of loan application rejection. If you are the one reaching the age of retirement, opt for short-term loans that include higher repayments every month to get the loan approval.
- Credit History
Lenders definitely check the credit history of the lender to ensure the repayment ability of borrowers before lending. If your financial record includes credit impairments like Judgements, Defaults, Part IX, Bankruptcy, Loan Arrears you will be deemed to have a bad credit history. In such a situation, you should consult bad credit finance broker to avoid the rejection of home loan application.
- Loan Tenure
Longer loan tenure means repayment of the loan amount in a longer duration. However, if you are having lower income then it is better to go for repayments for longer tenure for the successful outcomes.
- Job stability
Stable job plays an imperative role in getting home loan approval in Australia. Repeatedly changing the job can tend to the rejection of the loan by the financial institution.
To ensure the approval of the home loan, you should have complete property related documents. Before lending the amount to the borrower, lenders make sure that the property is approved by the local authorities. Certain documents required for the home loan approval includes building plans, title deeds, relevant authority approvals, and other documents.
- Previous home loan application rejection
Once the financial institution or lender rejects your loan application, it appears in your credit history. Previously rejected home loan application can also hamper the chances of home loan approval. Therefore, don’t apply for the home loan if you are not fully prepared to avoid the rejection.
- Inadequate Income Tax Returns
If you are self-employed then make sure to file income tax returns regularly. Most of the lenders don’t consider to lend money in case of inadequate ITRs. Most recent 3 years income tax returns are imperative to prove the flow of regular income.
Consider the above-mentioned factors while applying for loans in Australia to avoid the chances of home loan application rejection.