The days of easy home loan applications are long gone. Now, lenders want to know exactly what you’re doing with your money to the last penny before considering you for such a loan.

Taking this into consideration, here are a few tips to help you improve your chances to get approved for a home loan.

1. Prune Your Expenses

Peter the Bookkeeping expert from Concept Bookkeeping tells us that, “If you want to improve your chances to get that loan, you need to revise and reconsider your regular expenses. Apparently, all those morning lattes and Afterpay purchases could have a negative impact on your chances to persuade banks to approve your loan application.” This means you should try to minimise all purchases that aren’t really necessary such as taking an Uber to go to work and shopping online rather than getting your groceries at Aldi. By spring cleaning your expenses, you’ll save money and you’ll look like a personal finance management master when lenders will see your bank statements.

2. Build A Solid Credit History To Prove You Are Able To Repay Your Loans

The first and foremost requirement you must meet to get a loan is to prove that you can repay it. Lenders don’t necessarily want to see written budgets and repayment schedules, but they will surely want to see your current living expenses and your financial commitments. If you want a home loan, you need to be ready to disclose lots of details regarding your personal finances, spending habits, and financial commitments.

3. Keep Tabs On Your Credit Card Limits

Credit card limits are important because they are the expression of how much you could potentially owe to banks and other financial institutions. This means that if you have a credit card with a limit of $10,000 but you either don’t use it or you make your repayments on time, the bank will assume that you owe the entire amount of your credit limit. As unfair as it may sound, this is the harsh reality. If you want to boost your chances of being approved for a home loan, it’s best to hold only one credit card with a not so high limit.

4. Put Your Career Changes On Hold

Banks want to see how good you are at keeping jobs. Your ability to make your loan repayments on time depends on your income. This is why lenders want to see some stability. They want to see a minimum of six months spent with the same employer (probation periods don’t count). Job hoppers aren’t the best clients and banks know this very well. They won’t be willing to take unnecessary risks, so chances are they will reject your application.

5. Start Saving

Lenders will love you if you can show them a solid history of saving and perhaps a fairly healthy deposit you’ve built over time. The general recommendation is that you save about 20% of what you earn. There is a reason for this. When you borrow more than 80% of the total value of your home, you’ll need to pay lenders mortgage insurance. As you can easily imagine, this insurance is meant to protect the lender, should you find yourself in the impossibility to meet your mortgage repayments. The bigger your deposit, the lower the value of your loan, and therefore the less LMI you’ll have to pay. This can make you the ideal borrower, a client all banks would be thrilled to work with.

6. Repay Your Outstanding Debt

The bigger your debt, the faster the lenders will run away from you. Before you even consider applying for a home loan, try to repay as much of your outstanding debt as you can.

7. Set Aside Enough To Feel Safe

Mark at Cheap Trees tells us, “Should your income stream stop at some point in time, you’ll be glad to have a safety net to make use of. Set some money aside to serve as a buffer for difficult moments in your professional life.

8. Don’t Send Too Many Simultaneous Applications

While comparing lenders is a good thing to do, submitting applications to multiple lenders is not. This will show up on your credit report. It may not affect your credit rating, but it won’t look good, particularly if you’ve already been denied more than once.

The team at Any Rubbish say’s, “The best way to proceed is to compare all your options, but only apply for the loan that best suits your needs.

9. Honesty Can Take You A Long Way

The SEO experts at Search It Local say, “Even if your financial situation is not the most brilliant of all, it’s best to disclose this fact from the very beginning. You can rest assured lenders know how to find out such things. If you lie and they catch you, they will decline your loan.