Securing finance to buy or build a home has become increasingly difficult and tightened criteria mean lending institutions are knocking back more mortgage applications.

Potential homeowners can take steps to maximize their chance of securing finance and minimize possible rejection by the banks.

Broking firm The Mortgage Gallery has branches in WA and Victoria working with more than 20 banks and other lenders to help people find the right loan for their needs, and managing director Ryan Dhue has advise to give borrowers the best change of securing housing finance.

• People looking to borrow need to save. Proving a history of saving is an important factor in securing a home loan. Saving 10 per cent of pre-tax income is vital.
• Eliminate credit card debt – it’s expensive and something you don’t need when applying for a home loan and planning to pay a mortgage.
• Be thorough. Working with a broker will help you gather correct documentation. Provide all necessary information and be absolutely truthful to avoid delays.
• Understand how much you are able to borrow and what type of loan you need. A broker can be sure you apply for relevant products and amounts.
• Understand the market. Lending criteria have tightened. A broker can provide information to help you make the best decisions and apply for the right products.

Maureen Eppen

West Australian 12.12.09