Whilst you may not have a lot of assets or liabilities, it is always good to have a clear list ready for your lender.

An accurate way to work out exactly what your commitments are is to obtain a recent statement for all personal loans, car loans and/or credit cards you may have. The lender will almost always ask for up to date figures and paperwork to support the information you entered in your loan application so it is a good idea to have these documents ready.

It is advisable to not make any major purchases, such as a car, truck, boat or motorcycle that requires you to gain finance (a loan) in the lead-up to applying for a home loan. This will only increase your debt-to-income ratio and that’s something loan assessment officers will look closely at. For the same reason, it is best not to buy furniture or big-ticket items on credit at this time as it also will increase your debt and make it harder for the funder to respond to your home loan application with a positive answer.

Having a lot of debt increases your debt-to-income ratio. This is a key factor that lenders use to determine how much debt you can comfortably manage. Before you apply for a home loan, make sure that your credit card balances are low.

Refrain from using your credit to make purchases if you need to acquire a home loan. If your credit card balances are already high, start paying down the balances and keep them low.

Trusted Mortgage Broker has a great range of mortgage calculators to help with all those tough decisions that come with finding the right loan. Have a look at our calculators on our website to help you further. www.trustedmortgagebroker.com.au/calculators/

About the Author

Sue Hayter

Sue's service commitment is fantastic. At Trusted Mortgage Broker we work with our clients to ensure they understand their options, know exactly how much they can borrow and ensure they choose the right home loan and the right lender that is not unsuitable to their individual needs.

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