Preparing a successful finance or mortgage application

Written By Kim Manunui

Lenders make their money by lending to you and want to ensure they get it all back with interest and no issues along the way for either party, it’s all about responsible lending. 

They assess your income less fixed costs, core and other living expenses, add the new loan and determine your Uncommitted Monthly Income ( UMI ) allowing a margin to ensure it services and is well affordable.

Mortgages also need to meet Loan to Value Ratio ( LVR ) requirements but more on that in another article.

They will also run a credit check and look at your past history going back 5 years, of particular interest are any defaults and late payments in the last 2 years and your credit score which determines the risk they take lending to you based on account conduct, if everything stacks up, we have an approval.

Sometimes we come across matters that need attention, so we get a conditional approval or a fast no and look for another provider if need be. 

Some of the things we see that get in the way of an approval are –

  • Low credit scores

  • Defaults and late payments

  • Judgements

  • Poor account conduct

  • Over commitment

  • Marginal or no affordability

  • A high number of recent credit applications

  • Anti Money Laundering ( AML ) red flags such as gambling.

 

Avoiding the above is as simple as –

  • Ensuring ALL your accounts are paid on time made possible by not over committing

  • Avoiding reckless spending

  • Operating a bills account and direct crediting funds from each pay building up a month in advance

  • Not over committing

  • Maintaining a low number of credit applications.

 

In summary

Each time you apply for credit reduces your score slightly and a flurry of recent applications raises red flags that they are being declined so its important to only apply for credit if you’re actually going to take it.

Presenting well managed personal finances displays ability to handle responsibility and a good 6 months to 2 years of clean account conduct is looked favourably upon by lenders, something to aim for if it’s not already.

If you’re not getting results then STOP and take a look at why as the next application will likely decline as well, better still get in touch with a broker who is experienced in presenting applications and can see where the weak points are and mitigate them or devise a plan to tidy things up and prepare for further successful applications. We can workshop them with companies before submitting them to ensure the most chance of success and least effect on your credit report … more on credit reports next week.

At Infinance we take the stress out and put the results IN so give us a call if you’re looking to fund anything from vehicles to boats, trucks, tractors, diggers, equipment, residential or commercial property or rural, business plus the insurance to go … just hit the tab below and get in touch.

Kim Manunui

Hi, I’m Kim and I work with a great team to help individuals, as well as small and not so small businesses get their message, product and services to the world using digital media and creating wonderful websites that don’t cost the earth.

I was born in Canada, and grew up around Vancouver and the mountains of British Columbia. My love of pristine environments led me to New Zealand and eventually to the mountains, lakes and rivers of the central North Island which is home. My family’s heritage is here, and it’s from here that Korio traverses the planet.

The digital world is never static and neither are we.

And I say ‘we’ because I work with an awesome group of talented people who I gather together as required to complete a project.  Whatever your business, not-for-profit or individual needs are we gather the best team to get the job done.

Collaboratively we are creative, share sustainable values and work hard for great outcomes because that’s the buzz of satisfaction that drives us.

If you have an audience and market to reach, we can make that happen. Creative design, words that work and smart behind the scenes stuff that cuts through the online noise. We’ll design your website and then build it. We’ll manage the content as well as all your hosting needs. We can handle your online advertising so you get noticed,
and we’ll manage your social media presence so you get the clicks, likes and engagement to grow your business. All within the budget you set, because none of this needs to cost the earth.  And the job doesn’t stop when your website goes live. We are your virtual business partner.

https://www.korio.co.nz
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