Before we begin arranging a loan, we look into the kind of loan you might expect to qualify for. It’s really important to know exactly where you sit.
Lenders have varying expectations, and try to make their loans more attractive by creating points of difference. Borrowers have all kinds of individual circumstances that dictate what they can or can’t borrow. The Loan Arranger guides you through the process, offering informed advice based on our experience and extensive industry knowledge. There are many variables in qualifying for a loan, and they occur on both sides of the contract.
Leaving interest rates aside (because they’re really a reflection of the type of loan) there are many variables within the lending system.
Firstly, there is the amount banks are prepared to lend. Most lend up to 80% of the asset value, but some lend more, and if you include mortgage insurance then the amount can increase to 95%.
The amount of ‘genuine savings’ is also a factor. All lenders require a minimum of 5% of the asset value in a savings account for at least 3 months.
What constitutes income is another variable – for example, the Family Allowance Payment is regarded as income, but some banks don’t include it after the age of 12, while others allow it until the age of 16 for your children.
Having a guarantor is yet another topic for discussion. Usually, a guarantor needs to be a family member, but, again, this varies from lender to lender.
Then there are the varying repayment restrictions on Fixed Loans (and the fees that early repayment brings). And, of course, you have to prove to the banks you can service the loan.
Most of the borrower variables revolve around income. Applying for a loan is more straight-forward if you are a wage earner. Contract workers have to show a history of consistent, regular work. Self-employed people need to (in most cases) show two years of proven earnings and income potential. People who have recently started a new job may be required to complete the probation period. Other income variables, like maternity/paternity leave, are also taken into account. Then there are the outgoing variables – dependents, other loans, lifestyle and a whole myriad of individual circumstance that will affect your suitability.
We take everything into to account and present you with your best option. From there, we begin the arranging process.