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Date Published : Monday, August 11, 2008
Newspaper reports suggest that regularly paying your bills on time and taking your time while looking around lenders are two ways to bag that elusive home loan.
As the credit crunch tightens its grasp on the wallets of Australian consumers and ravages the balance sheets of the nation's banks, the Herald Sun has enlisted the help of mortgage experts to act as guides around the mortgage maze.
Phil Naylor, chief executive of the Mortgage & Finance Association of Australia, claims that lenders are "getting more stringent" and although they haven't overhauled their lending policies "they are dotting the Is and crossing the Ts".
Steven Anderson, InfoChoice head of research, suggests that consolidating your debt would make you more appealing to a bank.
Furthermore, Mr Anderson said that most major banks will be willing to look past a small default on a utility bill or a credit card and are more concerned with the frequency of the late payments.
Kelvin Lawrence, the general manager of mortgage portfolios at Westpac, agrees that it is a "trend" that banks look for.
Mr Lawrence also believes that an applicant's savings background plays a large part in their ability to secure a home loan.
"Having a history of genuine savings stands a borrower in very good stead with the institutions," he said.
The subprime mortgage crisis means that the number of specialist lenders that are willing to provide funds to candidates with poor credit ratings has diminished.
According to the Australian Bureau of Statistics, new home loan approvals fell 25 per cent in the first six months of the year.
Mr Naylor advised those who had seen their path to a mortgage blocked by banks to keep looking.
"The bottom line is if one lender doesn't want to lend to you - shop around," he said.
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