Prove that you have a solid record
One of the requirements that come with getting a home loan is showing that you have a permanent job, which means that you will be able to meet the repayment schedule. However, in such a scenario where you find yourself not having a full time paying job, you will have to prove it through financial records.
Your credit history report can act as a great spokesperson to your spending habits. Lenders will often look at it to get an idea of how you have been using your money. You can show your lender that you will be able to meet payments by:
- Paying all accounts on time.
- Paying more than the minimum of what is required from you when it comes to credit and loan repayments.
- Making sure that there are no arrears or bad listings that can decrease your chances of securing a home loan.
You can use your savings
According to the Australian Bureau of Statistics (ABS), there were 15,443,50 credit-active Australians in 2013. If you don’t have a credit history, there is no need to panic. There are people who are well into their mid-thirties who don’t have a credit history, and there are other ways to prove that you are financially savvy.
If you are applying for a home loan through your bank, you can prove this through your savings account. There will have to be a considerable amount of money in your savings to get the lenders nodding their head towards an approval.
There are other healthier ways that you can start building your credit history such as having a post paid mobile account, various utility accounts, or a personal loan.
You can get a co-signer
This is basically someone who will apply for the loan with you and you will be both held accountable in terms of meeting the repayments. It will be best to go with someone who has a good credit score and no bad listings. This will also have to be a decision you will have to consider carefully and be certain that you will play your part in paying off the loan.
If at first you don’t succeed…
Some lenders might still be wary of giving you a home loan, but that shouldn’t demotivate you. If they have denied your application, you can ask them to tell you in writing why it has been disapproved. Then it is back to the drawing board.
Fix the errors which have been pointed out and find ways to strengthen your credit history. Don’t bite off more than you can chew by applying for various loans and accounts that will be hard to pay off later. It will work in your favour to shop around. Where one door closes there is always that will open.