21 Sep The lending criteria used for mortgages and why a mortgage broker can help if you don’t meet them
Thinking about taking out a property loan in Australia? Then you might want to talk to a mortgage broker like ourselves before you apply for a mortgage. We can walk you through what it takes to get a loan on a property and we may be able to assist with finding a mortgage if you don’t meet the standard lending criteria for a mortgage.
The Criteria For A Mortgage
Each lender has different criteria for deciding whether or not to grant a loan but in general, they will expect you to be:
- 18 years old or over
- An Australian citizen or permanent resident
- Fully employed and able to prove that you are employed
- Have a minimum level of income
- Able to prove that you’ve had that income for at least 3 months
- Have a record of savings or a record of repayments for a period of 3 months
- Have a clean credit record and no declaration of bankruptcy in your past
- Able to show stable living arrangements
They will also normally expect that the loan will meet some criteria too:
- That your loan doesn’t exceed or fall below the amount that they are willing to lend
- That your loan will be used for the exact purpose specified by the agreement (you can’t use your mortgage to fund a round the world trip if you say it’s to buy a property)
- That you will pay a deposit on the loan, typically of 20% of its value
They may also require that the property you mortgage meets certain conditions:
- It is a property that can be easily resold if you can’t repay the loan
- It is a property in a location which is acceptable to the mortgage provider
- It is a property which has been correctly zoned for residential use
What Happens If I, The Loan Or The Property Don’t Meet A Lender’s Criteria?
It’s fairly simple. If you don’t meet the lenders criteria in any respect, normally the lender will refuse to provide you with a mortgage. It’s worth noting that the institutions with the most conservative criteria are usually banks and it’s one of the reasons it’s often better to discuss a mortgage with a mortgage broker rather than a bank representative.
So, How Can A Mortgage Broker Help?
A mortgage broker isn’t a bank. A mortgage broker has access to many different types of loan with different criteria for each type. Here at Aspirus Financial Service, for example, we can access more than 2,000 different loans. That means we’re well positioned to help you find a lender whose criteria you can meet or which may vary the terms of the loan or the criteria placed on the property.
If you’re serious about a mortgage and you can’t get a loan easily, a mortgage broker in Melbourne such as ourselves may well be able to help even if your bank can’t.