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Re: How do I increase my chances of getting approved by a lender, even with low deposit

Posted: Tue Aug 06, 2019 7:03 pm
by Otto Dargan
Hello Jennifer.

Welcome to the forums.

Most lenders have strict lending criteria for borrowers with low deposits, but if you meet the following requirements, you might have a good chance of getting approved.
  • The lenders will look into your income carefully as this forms the basis of your assessment to make mortgage repayments.
  • There are restrictions on property types and locations for a low deposit home loan.
  • You should have a clean credit history such as no late payments on personal loans, not paying credit cards, etc. (Some exceptions apply)
  • You must have accumulated genuine savings of at least 5% of the property value that you've accumulated over a period of 3 months. (Some exceptions apply)
  • Your age and income should reflect a relative level of assets like owning a car, savings, etc.
  • Lenders usually favour those with reliable and stable employment history of at least 5 months in your current role or 2 years in the same line of work.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a low deposit home loan.

Cheers,

Re: How do I increase my chances of getting approved by a lender, even with low deposit

Posted: Tue Aug 06, 2019 8:12 pm
by Otto Dargan
Hi Jennifer,

It should not be an issue if you are making payments on time.

However, you might look into reducing your credit card limit or cancelling the credit cards that you do not use to improve your borrowing power. Using the borrowing power calculator, you could assess how the lender would view the monthly surplus income.

For instance, if you are earning $90,000 p.a with a credit limit of $10,000, then the monthly surplus income would be around $9000, but if you reduce your credit limit to $5,000, then your monthly surplus income will increase to $9500.

You might want to look into bad credit home loans for more information on this.

Cheers,

Re: How do I increase my chances of getting approved by a lender, even with low deposit

Posted: Tue Aug 06, 2019 8:23 pm
by Otto Dargan
Hi Jennifer,

While the size of the deposit impacts the interest rate, it’s not the only factor, a lot of it depends on your overall situation.
If you show a lender that you are a good borrower with employment stability, stable income and good asset position, etc., you may enjoy the same rates as borrowers with a higher deposit. You may even qualify for the same interest rate discounts. There are certain restrictions and requirement so please read our 95% home loan page.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a discounted interest rate on your home loan.

Cheers,