“5 Tips to Get Finance Ready”

Increase your borrowing power and decrease your potential repayments by following these tips.

1. Eliminate High-Interest Debts

Start your home loan journey on the right foot by clearing out any high-interest debts. This includes credit card balances, personal loans, payday loans, and any other form of debt that might be eating into your monthly budget. 

Not only does this improve your credit score, but it also frees up more of your income to allocate towards a mortgage, making you a more attractive candidate to lenders.

FACT: $10,000 of credit card limit you have (not your outstanding balance), reduces borrowing capacity by $50,000! 

2. Settle Your HECS Debt

If possible, pay off your Higher Education Contribution Scheme (HECS) debt.  

Although HECS is not a ‘bad debt’ and doesn’t inherently lower your credit score, having it paid off can significantly increase the amount you can borrow. 

Lenders consider your HECS debt when calculating your yearly obligations, and without it, you’ll have more borrowing power.

3. Establish a Savings Pattern

Demonstrating the ability to save consistently is gold in the eyes of lenders. 

Start by setting aside a portion of your income regularly into a savings account – ideally using the governments First Home Super Savers Scheme (FHSSS)  

This shows financial discipline and builds the necessary deposit you’ll need when applying for a home loan. The bigger the deposit, the less you must borrow, and the more favourable your loan terms can be.

4. Monitor Your Credit Score

Regularly check your credit score and review your credit report for any discrepancies or areas of improvement. 

A higher credit score can significantly enhance your attractiveness as a loan applicant, potentially leading to better interest rates and more favourable loan terms.

FACT:  Generally, credit scores from 580 – 669 are considered fair; 670 – 739 are considered good; 740 – 799 are considered very good; and 800+ are considered excellent. You want to have a good credit score as a minimum. 

5. Consult an Experienced Mortgage Broker

A seasoned mortgage broker will be your greatest ally. 

They have an in-depth understanding of the market and can offer bespoke solutions on the best loan products that suit your needs and objectives. 

They will navigate the complex landscape of loan applications on your behalf, making the process smoother and increasing your chances of approval. 

By following these tips, you will not only prepare yourself for applying for a home loan but also position yourself as a prime candidate in the eyes of lenders. Find out more by following @farmersfinance on Instagram.

We will post tips daily to help you better your finances. We are here to help. Our goal is to help you secure the best loan options that suits you. Don’t make any big decision without consulting a broker. Residential Brokers are a free service to save you money. So, what are you waiting for? Get started with Farmers’ Finance today!

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“5 Tips to Get Finance Ready”

“5 Tips to Get Finance Ready”

Increase your borrowing power and decrease your potential repayments by following these tips.