The simple answer is to get ready to become a subject matter expert on your household finances and spending!
Banks have to meet the Responsible Lending Code—meaning they need to dig deep into your income, source of income and household expenses, to ensure you meet responsible lending criteria.
What are ‘household expenses’?
These include day care/childcare bills, how much you spend on groceries, and power, as well as rates, subscriptions, entertainment and credit card bills. If you have lots of ‘little’ loans—for a holiday, new TV or furniture, it’s a good idea to consolidate into one loan to tidy this up.
You need to disclose absolutely everything on your application form—debts you intend to pay off but are still active, credit card limits (even if you pay off in full each month). If you have a store card—like a GEM visa—that is unused, but could still be ‘live’, make sure you close them as well.
What the banks are trying to know through your mortgage application is an overall picture of your finance and spending habits. Our best advice is to work with a registered mortgage broker from the start.
Your Pope & Co mortgage broker will make the application process as smooth as possible, foreseeing any possible issues and getting you the best possible result. That includes help with tidying up any debt and having a plan to get you into a home as quickly as possible. Give the team a call today on 0800 000 517.