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Look good on your home loan application with these expert tips

By Caoimhe Hanrahan-Lawrence โ€ข Leave a Comment

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By Marcus Roberts

Before you set off for a pre-approval from a lender for that all-exciting (and somewhat stressful) home loan, you need to get your bank accounts in order to give yourself the best chance of having your home loan approved. 

Think of applying for a home loan the same way you would approach a job interview โ€“ you need to tidy yourself/bank accounts up and present the best version of yourself/bank accounts you can.

As a mortgage broker I have seen so many clients that I wish I had met six to 12 months prior, so I could have helped them clean up their accounts so they present their finances in the best version of themselves to the banks.ย 

The following are my top tips to help you clean up your accounts in preparation for applying for a home loan.  

Cancel your credit cards 

Whilst paying your card balance off every month is sound money management, most lenders see a credit limit rather than a balance as the amount you have easy access to. If youโ€™ve never used a card with a $10,000 limit, the lender will still use the $10,000 rather than $0 in their assumptions. If youโ€™re looking to maximise your borrowing capacity, look to close or reduce these limits as much as you can and get letters or evidence from the card provider.

No more Afterpay

Whilst having a โ€˜buy now pay laterโ€™ liability such as Afterpay or ZipPay can be handy for purchases, they do need to be declared. If youโ€™re not using them, decide whether youโ€™re comfortable in cancelling the facilities.

Also, if you have a few buy now pay later transactions coming out of your bank account each month, these can be viewed by lenders as expenses, which will affect your borrowing ability. Whilst not explicitly stated by most lenders, the opinion can sometimes be that using this type of credit rather than cash for these types of purchases can suggest a borrower that might not be perfect at managing money.

Save! 

This element of presenting your accounts in the best version they can be goes without saying. However, as we all know saving money is not easy and takes discipline and work.

One task I recommend you undertake is to list down all of your monthly subscriptions that automatically come out of your bank account each month and then cancel or cut back all the ones that arenโ€™t aligned with applying for your home loan. Do you really need that Spotify Premium account and do you really need both Stan and Netflix for these few months? Reducing your monthly expenses as much as possible will help you immensely in obtaining that home loan.ย 

Saving a deposit vs Lenders Mortgage Insurance

So how much deposit should you be aiming for? Obviously, the more money you save for your deposit, the less money you need to borrow from the bank and in an ideal situation you may be wishing to save at least 20% deposit so you donโ€™t have to pay for Lenders Mortgage Insurance (LMI). This can be a difficult task, especially for first home buyers. For example, if you are looking at purchasing a $650,000 home, youโ€™re looking at needing a minimum $130,000 deposit, plus upfront costs. 

What is LMI? Lenders Mortgage Insurance (LMI) is a one-off, generally non-refundable, non-transferrable premium that is added to your home loan. It is calculated based on the size of your deposit and how much you borrow. The more you contribute to the purchase price of your property, the lower the cost will be. LMI is there to provide comfort to the lender, against any loss they may incur if you are unable to repay your loan. If you default on your obligations, the bank may sell the property, and if they canโ€™t repay the outstanding loan, LMI may be utilised. 

The cost of LMI varies as it scalable to the size of your home loan and also how much deposit you have. The higher the deposit and the lower the home loan, the less your LMI will be. If you would like to avoid LMI altogether, you will need to have a minimum 20% deposit. 

If you are a first home buyer, check if you qualify for the Australian Governmentโ€™s First Home Loan Deposit Scheme, which will save you paying LMI. The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to build or purchase a new home sooner. 

Under the Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5% (lenders criteria apply). This is because the National Housing Finance and Investment Corporation (who administer the scheme) guarantees to a participating lender up to 15% of the value of the property purchased that is financed by an eligible first home buyerโ€™s home loan.

LMI should not be viewed as a total negative though, paying LMI generally allows you to enter the property market sooner and the cost of LMI will be more than recouped when your property increases in value. Also, by having LMI, you wonโ€™t need to rely on a guarantor to supply additional security to secure your home loan. 

Speak to a professional

My final piece of advice is to speak with a mortgage broker at the start of your journey – donโ€™t wait six to 12 months down the track of your savings plan. A mortgage broker has the experience and expertise to guide you on your savings plan and assist you in developing good saving and spending habits to help you save that deposit!ย 

–Marcus Roberts is a mortgage broker and property finance expert at Brighter Finance.

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April 26, 2021

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SALE ALERT! Listen up Sydneysiders, one of my fav SALE ALERT!

Listen up Sydneysiders, one of my favourite home stores @shack.furniture.homewares are having their annual warehouse sale this week, from Thursday until Saturday.

HUGE savings on furniture, homewares and decor with 30 to 80% off. Wowsers!

I'm a big fan of SHACK and can never leave one of their stores without a few styling goodies for my place! It's just too tempting!

While you're at the sale, mention Interiors Addict for an extra 10% off!

Unit 16a, 1801 Botany Rd, Banksmeadow NSW 2019

Thursday 1st to Saturday 3rd June 2023, 9am to 4pm. Not online.

#sydneyshopping #sydneysale #sydneysales #sydneyfurniture #shackfurniture #shackfurniturehomewares #interiorsaddict #theinteriorsaddict #jenbishop #heartyourhome #comeshoppingwithme
A door to door continuous curved stone ledge in th A door to door continuous curved stone ledge in this bathroom is one of the cleverest designs we've seen in a while!

This mega ledge, made of Corian, even incorporates a sink, seamlessly.

Combined with venetian plaster on the walls, it's no wonder this Illawarra bathroom by @birdblackdesign feels like a day spa!

Come check it out via link bio.

Lead designer Stuart Gibson says: "One smooth curve, right around the room, from either side of the door opening. As it moves around, it creates a ledge for the bath: for bath oils, lotions, a book and a champagne glass. The ledge continues around and becomes the vanity, widening out to create a custom seamless basin."

#bathroomhappiness #bathroomdetails #bathroomshelves #bathroomshelf #venetianplastering #coriandesign #coriansolidsurface #spalikebathroom #spabathroom #sustainablebathroom
Catch the season finale of @sellinghousesaus last Catch the season finale of @sellinghousesaus last night?

We have all the before and afters for you on the blog now, via link in bio (and swipe for a taster).

#sellinghouses #sellinghousesaustralia #foxtel #lifestylechannel #beforeandafterkitchen #beforeandafterlivingroom #beforeandafterrenovation #realitytv #housetours #interiorsaddict #theinteriorsaddict #jenbishop #heartyourhome
๐Ÿ˜ Not sure what's better: the custom mirror abo ๐Ÿ˜ Not sure what's better: the custom mirror above the fireplace in this Art Deco one-bedder or the wallpaper in the kitchen (swipe)?!

It's been a while since we featured an apartment makeover on IA. Would you like to see more apartment interiors? Head to the blog now to see more of this one. Via link in bio.

#artdecoapartment #artdecointerior
#artdecomirror #artdecofireplace #artdecomelbourne #artdecofurniture #artdecobuilding #artdecointeriors #apartmentrenovation #apartmentinterior #smallspaceliving #melbourneapartments #melbourneairbnb #kitchenwallpaper #wallpaperaustralia
Low tox and planet friendly laundry liquid (and sh Low tox and planet friendly laundry liquid (and sheets and soap and powder!). We have a great roundup of the best options on the blog today. 

A whole host of brands are offering eco-friendly, low tox alternatives to the more chemical-laden ones. Not only that, they often smell amazing, look good on your shelf and come in recycled or recyclable (or even better, both) packaging. 

Good for your skin, your clothes and the planet: whatโ€™s not to like?

Do you use any of these?

COMPARE THEM ALL VIA LINK IN BIO NOW.

#lowtoxliving #lowtoxlife #lowtoxlifestyle #lowtoxhome #lowtoxlaundry #lowtoxswaps #naturallaundry #naturallaundrydetergent #naturallaundrysoap #ecolaundry #lowtoxcleaning #ecofriendlyhome #ecofriendlyhouse #laundryliquid #laundrypowder #laundrysoap #naturalcleaning #chemicalfreecleaning #interiorsaddict #theinteriorsaddict #jenbishop #heartyourhome
Play room goals!๐Ÿ‘Œ๐Ÿป This is just one room fr Play room goals!๐Ÿ‘Œ๐Ÿป

This is just one room from today's real house tour which I really love because in employing interior designer @issyandhcreative the owners weren't looking for a complete rip out and re-do but rather to work with what they had in their new suburban home (including a dated kitchen) and give it a largely cosmetic glow up with styling and new furniture (some of which was upcycled). 

The brief was to create a family friendly home. "They weren't looking for perfection but rather a warm and relaxing retreat for their busy young family." This playroom though? Pretty close to perfect! And the mum did the colour coded books herself. Love that๐Ÿ˜

Head over to the blog now via link in bio to see the rest of this home.

#playroomideas #playroomgoals #playroomdecor #familyhomes #kidfriendlyhome #kidfriendlyinteriors #familyhomedecor #sustainabledecor #affordablerenovations #interiorsaddict #theinteriorsaddict #jenbishop #heartyourhome #beanbagchair #beanbags #colourcodedbooks #colourcoded #toyroom #kidsroomdesign 

Pix by @tealily
All the heart eyes for this little setup ๐Ÿ˜ Hea All the heart eyes for this little setup ๐Ÿ˜

Head to the blog to shop this and two other gorgeous styled images from @greenhouseinteriors 

The stunning @mrsniceart artwork has already sold but the good news is, you can still get prints of it!

Styling by Aisha Chaudhry for Greenhouse Interiors, assisted by Nikki McGar, Kylie Harris, Rachael Blake and Max Green. Photography by Stephanie Rooney. 

#poolart #sideboardstyling #buffetstyling #consolestyling #vignettes #greenhouseinteriors #barcartstyling #shopthelook #bluehomedecor #poolumbrella #beachumbrella
Bookworms need a cosy book nook! ๐Ÿ“– ๐Ÿ› Seb an Bookworms need a cosy book nook! ๐Ÿ“– ๐Ÿ›

Seb and Charlie had one of those kid size couches in their playroom but frankly, they'd outgrown it! I picked this Aussie made compact 2-seater Ruby sofa from @fantasticfurniture 

I'd usually go for grey to keep it neutral but as it's in a kid's room I went for this heather blue fabric to make it a little more fun while still classic. There's more than 50 fabric choices for Fantastic's Aussie made range so good luck choosing ๐Ÿ˜‚ 

I left the legs off to keep it below the windowsill. I'm super happy with the quality. It looks a lot more expensive than its $699 pricetag ๐Ÿ‘Œ๐Ÿป

Books, natural light and a cosy couch = happy boys! And let's not pretend they won't be watching the odd movie on there too ๐Ÿฟ because #keepingitreal

#FantasticFurniture #FantasticFamily #booknook #booknookstagram #booknook #bookwormsofinstagram #littlereader #littlebookworm #cosycorner #cosycorner #playroomideas #toyroom #interiorsaddictfamilyhomereno #interiorsaddict #theinteriorsaddict #jenbishop #heartyourhome #aussiemade #aussiemadefurniture #twoseater #kidssofa #kidscouch #bluesofa #loveofreading
Last week we interviewed chalk paint pioneer Annie Last week we interviewed chalk paint pioneer Annie Sloan from her UK base about colour and Aussies' relationship with it. (And how's this for a before & after kitchen?! ๐Ÿ˜)

Annieโ€™s latest green hue, Coolabah Green, is inspired by the Eucalyptus trees of her childhood (did you know she was born in Sydney?). โ€œI made it in tribute to Australia and Iโ€™m thrilled to say thatโ€™s been really popular both here in the UK and in Australia. Itโ€™s a kind of smoky, silvery sage green thatโ€™s very easy to work with and would complement accents of Amsterdam Green deliciously.โ€

Sales stats show Aussies are all about greens while elsewhere in the world greys and blues are more popular from her range. So tell me, are you a green lover?

Head to the blog to read Annie's thoughts on upcycling furniture and more. Via link in bio.

#chalkpaint #chalkpainted #chalkpainting #chalkpaintfurniture #chalkpaintlove #chalkpaintmakeover #anniesloanchalkpaint #anniesloanhome #anniesloanpaint #paintedkitchencabinets #paintedkitchen #paintedkitchens #upcycler #upcyclers #upcyclersofinstagram #upcycledfurniture #interiorsaddict #theinteriorsaddict #jenbishop #heartyourhome #anniesloan #greenkitchencabinets #greenkitchens #greenpaint #coolabahgreen #coolabah
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About Caoimhe Hanrahan-Lawrence

Caoimhe is interning at Interiors Addict as part of their degree studies at the University of New South Wales

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