As one of many mortgage advisers, it was very notable that many of our big lenders didn't start a "spring campaign" of goodies last September. There was also a notable shortage of the usual Christmas functions for advisers as well.
I guess we can put this down to what is a well known fact - it really is harder now to get a lender to say "yes!"
So, perhaps we need to focus a little more now on three of the vital elements that lenders look for - income, equity or savings, and loan term.
The first element is a given - we need to prove income and its ability to pay the loan installments over the loan term. Any lender's website mortgage calculator will help with this.
The second is also straightforward - we need to prove a savings record through the equity we have in our home or our savings in the bank.
The third element can be something we have taken for granted in the past. A 30 year loan term is fine for a 35 year old, but at age 45 onwards our lender will want to know a little more. That may not be an issue if we intend to eventually sell and downsize to repay our mortgage, or use our KiwiSaver funds to achieve the same result - but the lender will just want to be told that now, whereas in days gone by it wasn't such an issue.
So, perhaps we need to get a little "fitter" to borrow successfully now - if we have a bit of short term debt, let's set up a regular credit to a savings account and so give us the option to repay or reduce this debt at loan application time.This will show the bank that we have plans and are disciplined.
There are other "fitness" techniques we can consider. Want to know more or discuss?
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