5 Tips to help increase your home loan approval chances during COVID-19
Lender requirements have become a lot more stringent during COVID. Here’s a look at things you need to keep in mind to boost your approval chances.
#1 Prepare for queries if you are on JobKeeper Subsidy
If your employer is receiving JobKeeper Subsidy on your behalf, it will appear on your payslip. Its appearance, however, doesn’t in any way affect your credit score or your eligibility for a home loan so long as there is no change in your hours worked. To ensure that the lender is fully satisfied, it is best to have a talk with your manager for a possible call from the lender for assurances of job security.
#2 Wait it out if your working hours have fallen
A decline in your hours worked can significantly impact your chances of mortgage approval. If you’ve had a decrease in the number of your work hours, it’s best to wait for a rebound in your hours worked before you apply for a home loan. This is the case even if you haven’t suffered a decline in wages in the wake of the JobKeeper subsidy. If you are working fewer hours but are receiving regular compensation due to the JobKeeper subsidy, lenders will view this as a temporary fix in anticipation of a significant reduction in pay once the subsidy ends.
#3 Consider lender processing times
A lot of lenders rely on external vendors overseas to process loans, and on account of COVID, their processing times have changed significantly. If you are therefore looking at a quick approval, be sure to know the processing time of your lender. A very long approval and processing period could result in missing a good property deal. It’s best to go with a mortgage broker who could advise you on the processing time involved.
#4 Be mindful of online and discretionary spending
Lenders are looking at lifestyle expenses more closely. Avoid using savings from reduced commuting and eating out on arbitrary purchases. Lenders may view an increase in such spending despite no change in savings as habitual long-term spending that could adversely impact mortgage approval chances. On the contrary, use this reduction in expenses as an opportunity to put back extra cash into an existing mortgage or build genuine savings that could improve your mortgage approval chances.
#5 Rely on professional advice
The post-COVID mortgage landscape is changing rapidly; it is best to seek professional advice to understand which lender is best for you. Avoid getting your credit score or living expenses checked by multiple lenders. Credit score enquires by lenders get recorded in your credit file and could adversely impact your approval chances. On the other hand, credit checks or living expense analysis by a mortgage broker leaves no footprint at all. A better approach would therefore be to understand lender requirements from a mortgage broker, selecting the most appropriate lender, and consequently working towards fulfilling the requirements of that lender.
If you have any questions please don’t hesitate to ask us, we can even assist you in obtaining a loan.
This article was sourced from our partners at Yellow Brick Road.
