loan approved!Everyone knows that the banks have become very conservative with their lending criteria and there is no doubt this has created challenges for all property buyers.  

But the property market still moves. Sales volumes are anaemic but houses are still selling. So someone is buying them (often with a mortgage) which means banks are still lending. In fact, banks make a fair old margin by lending money so while it might be hard to believe, they are keen to lend!

The key to success is to have a clear idea of what the bank requires and then present it to them in a way which makes it easy to approve your application. It’s all about making a good first impression.

In lending we talk about the 4 ‘C’s’ — Capital, Collateral, Capacity, Character and a tick in each box means your loan will be approved. If there is one thing banks are looking at very closely it is the last C, Character. They want to know if you are the kind of person who will make every effort to pay the loan back. Are you good for it?

Looking closely at your ‘Character’ is a direct reflection of the Global Financial Crisis. Remember all the finance companies that went bust and took grandma’s life savings with them? They basically lent grandma’s money to people who were deficient in some or all of the ‘C’s’ and since your bank doesn’t want to make that mistake, don’t be surprised if they’re squinting at you!

What can you do? If you are considering buying a property then you need to make sure your presentation to the bank is flawless. The best way to do this is to use a broker who will screen your application long before it gets anywhere near the bank. They’ll also present it in a way that makes it easy to approve and therefore enhance your chance of success. A broker’s service is normally free, so why wouldn’t you? Remember, you don’t get a second chance to make a first impression.


About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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