While banks and other lenders have softened lending criteria recently, the pay-off is that they are tightening up on the level and type of information they want to know about potential borrowers.
Instead of simply looking at credit reports and credit scores, employment status, income, current assets and existing debt, lenders are increasingly scrutinising the spending habits of applicants to get a clearer picture of how well a borrower will be able to service their loan.
It actually makes good sense, and can even work in an applicant’s favor if they can show that their record on spending is reasonable and sustained, and there are discretionary costs that an applicant can easily bring under control.
For most people however, life is often a simple but detrimental case of: ‘money in – money out’, with no actual recognition of where their hard-earned cash is going, and little to show for it. And this is where many loan applications can come unstuck.
So, if a mortgage or refinancing is on the horizon (or even a few years down the track), the sooner you gain an in-depth understanding of your expenses – and take steps to correct any bad habits – the better it will be when the times comes to deal with your lender.
Drawing on their years of experience, the WhiteStar Brokers are in an ideal position to predict the types of questions that lenders will ask, and identify the areas of spending that they’ll focus on.
As well as offering guidance in getting your credit rating in the best shape possible, such as debt repayment or consolidation, our brokers can assist in improving your track record of spending, with the help of WhiteStar’s own Money Management tool, which keeps a log of your spending habits in real time, flags discretionary spending and looks for ways to save money each month.
Don’t leave borrowing to chance. Have a chat to an expert broker at WhiteStar today and set yourself up for a better financial future.