Increasing your home loan eligibility is a task that comes up time and time again. With the current financial climate, many Australians are looking to put their house on the market in order to find a more suitable purchase they can afford. In order to increase your potential payoff, there is plenty you can do! The following ways will help you wrack up your potential payoff.
Table of Contents
#1. Increase Your LVR (Loan to Value Ratio)
Increase your LVR by shopping around and always ensure you get the best deal. You don’t want to pay a mortgage for the next 20 years, only for it to fall into foreclosure or sell at a loss eventually. Do not be afraid to ask around, as many lenders have ladders that allow you to get the most out of your home loan once it has been paid off. In most cases, you can make a small deposit on your home loan and use your savings to reduce the loan amount.
#2. Make Changes To Your Credit Report
Changing your credit report has become second nature for many Australians, but it is important to not only have a healthy score on your report but one that is also accurate. As soon as it is time to sell your home, you will want to get some feedback from the potential buyer about their credit score before you sign over the deeds. This will give you greater insight into whether or not they might be able to afford the property.
#3. Increase Your Credit Limit
As you do with your mortgage, it is important to make sure you know your credit limits regarding your verifiable personal income. If you struggle to make a payment each month, it may be time for a little credit increase. This is not always suggested, as it opens you up to the risk of being sued by the bank if the loan goes into default. However, if you are ready and able to pay off the debt regularly, this could be something worth looking into. VA homes for sale can be very appealing to many home buyers.
#4. Pay off Your Credit Cards First
While paying off your loans and other debts is a good idea, it is even more important to pay the credit cards of all the unsecured creditors, such as utility companies and retailers, before moving on to your mortgage debt. The reason for this is that you may be able to sell or refinance the debt for a much lower amount than you would be able to get at a later time if you start paying it off earlier.
#5. Save as Much Money as Possible
Nothing is more beneficial to increase your home loan eligibility than saving money. Saving money is a simple way to stay on top of your debts, but it can be hard to achieve if you are constantly in the red. There are many ways to save money. Some people choose to work from home in order to bring in more funds. Others may choose to reduce their spending at home as much as possible for them not to be overdrawn on their account.
#6. Consider Refinancing
If you have paid off the majority of your debt and were able to lower some of your rates, it might be time for you to consider refinancing with a different lender before losing out even more money through a capital gain if the property goes up in value during the term of your loan. Remember to check that you will have the same lending criteria as your new lender.
#7. Talk to Your Lenders
If you have been finding it difficult to meet your repayments, it may be a good idea for you to talk with the lender or broker about making an extra payment towards your loan. Some lenders are willing to offer flexibility in their contracts and allow customers struggling financially to do their best to pay more towards their debts without impacting the interest rates or charges they may incur. However, this is not always possible. A lender can refuse any advances made towards the principal sum of money if chosen not to participate personally in the loan.
In conclusion, if you have a home loan and find it difficult to find the extra money to make your property one of the better places to live, you need to keep all options open. By doing whatever you can think of, you will be putting yourself in a better position for when you eventually sell or refinance your home. This can work in your favor even more than if somebody else buys your property at the right time because they may not need as much money when they take over the lease.