This is a question we often get asked… how will my lender assess my application?
Well, each lender has their own methods for weighting the factors they use to measure applicant’s ability to repay their loan, however, this means there is no definite criteria on how lenders judge their clients. This secrecy is for good reasons as to prevent any fraud and manipulation of the system!
Although the benchmark differs slightly between the lenders, there are some things that they generally look into to check the applicant’s credibility, and some things you can keep in mind when applying for a loan.
– Your borrowing power (Your capacity to afford monthly repayments, while still having enough to enjoy life)
– The loan to value ratio (Percentage of the loan value against the value of the property)
– Your credit rating
– Your fiscal character (How you usually spend your money- lifestyle & spending habits)
Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.