Choosing the right lender
The lender you choose often determines just how effective all the previous steps are (see my previous posts on How to find the right, cheap home loan for you ,Parts 1 – 5).
Every bank calculates their loans in different ways. Some accept certain forms of income (such as family allowance payments, casual income, etc.) while others do not. Some banks assume different amounts when working out your living expenses and how much disposable income you have. They also look differently at any existing loans and credit cards you may have.
Key Point
Each bank has its own “Assessment Rate”. They don’t usually assess how much you can borrow based on the interest rate you will be borrowing on; instead, they use a higher interest rate to allow for future rate changes.
This is important to know because if you apply to a lender and get knocked back, it makes it harder to get approved with the next lender because it leaves a record — a ‘credit enquiry’ – on your credit file. This is because when the next lender sees it, particularly if there are a lot of credit enquiries on your record, they become concerned as to why other lenders are declining your application or think you are a reckless borrower, which counts against you.
Not only that, banks also frequently change their affordability calculations depending on their own internal requirements. They often intentionally reduce or increase the amounts their customers can borrow. In fact, depending on the type of loan you choose, you can often borrow a different amount from the same lender.
For all of these reasons, it is important to cautiously choose the right lender for you and your situation.
Valuable Resource: have an expert help you
Speak with your Mortgage Australia Broker to find out the discount loans you are eligible for Just let them know you have read ‘The 7 Easy Steps to Mortgage Freedom’ and they will know how to help you
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