There are many reasons why people need finance perhaps to buy a car, go on a holiday, because they are getting married or in so many cases they are taking a giant step onto the property market.  

Applying for finance can often be a daunting task and obtaining finance can sometimes be difficult especially if you have a history of debt or are looking at refinancing or need to get fast approval due to a short settlement on that dream property. 

Below are some simple and practical tips which are sure to help you improve the likelihood of your finance application getting that all-important tick of approval.  

Take care of debt: Most lenders take into account debt you currently have that needs to be paid off. Currently being in debt could affect your chances of getting finance, so it’s important that you handle this right away. Settle any payments on credit cards and if you have open ones, close them so that the financial institution you are applying with is assured that you won’t be accumulating any further debt elsewhere.  

Ensure your finances are in order and your taxes up to date: If you are applying for finance for anything but especially property finances then it is essential you have your financial affairs in order, particularly your tax returns. You need to be able to demonstrate you are fiscally responsible.  

Apply for the appropriate loan: All financial intuitions will check in with your employer and want to know your exact earning capacity. They will be looking to see that you earn a sufficient amount that will allow you to pay off the debt in addition to meeting your living expenses. Make sure you only apply for a loan that you can comfortably service. 

Work out your budget: In most cases the borrowing capacity you will be offered will be determined by both your income and your credit rating. Based on these two things a certain sum will be available and it is best to work this out prior to submitting your official loan application by getting pre approval. Before you go through with a finance application it is always sensible to firstly apply for pre approval to make sure you are in fact eligible to take out a loan and also so you are aware of how much your budget will be for your dream home.  

Become a saver: If you are considering applying for future finance it is always a good idea to demonstrate you have a history of savings over a period of time. By regularly making deposits into a savings account you will be showing financial institutions that you have a history of savings and proof of how much you make and can produce at the end of each month. Making deposits in the months before you apply for the loan will give you a better chance of approval than depositing one large amount at the time of application. Most financial institutions are looking for patterns of savings behaviour. 

Understand transaction costs such as stamp duties and fees: A rookie error that many new borrowers make is to not fully understand transaction costs on purchases and refinances. Borrowers need to make sure that they fully understand all fees and costs associated with finance. There are many free stamp duty calculators available online to help you get an idea of associated costs to your loan, but it is helpful to ask your broker or lender to provide what is known as a ‘funds to complete’ calculation, so you can clearly see your financial position in relation to transaction costs. 

Get a document checklist before lodging your loan application: To ensure that you have the best chance of getting finance approval, it is important to be organised, prepared and provide the financial institution with all the information they need. Different lenders have different requirements. Some require more paperwork than others, so check in with your finance broker and ask them to provide you with a checklist of documents that you will need to fully complete your loan application.  

Getting finance approval is very important and you must understand that there is a lot to be checked before any institution will hand over money. By following the above tips you will be setting in motion the best possible scenario for you to get finance approval and one step closer to getting onto or expanding your presence on the property ladder. 

About the author

Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline.  She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses.  She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics.  She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.

Follow us on for regular updates, or book in for a strategy session to discuss your property questions. 

Disclaimer – This information is of a general nature only and does not constitute professional advice.  We strongly recommend you seek your own professional advice in relation to your particular circumstances.