It’s becoming more and more apparent that investors don’t know how to apply for a loan.
Now I understand if that sounds harsh, but most investors complain about the loan application process, they blame the bank, blame the broker, blame god but fail to take responsibility for the crappy financial position they in.
And what I mean by that is, you may have a great job, a consistent salary, solid savings, and paying your bills on time…
So you’d be wise to think that you tick all the boxes…
You need to start treating the process of applying for a loan like a job interview (financially speaking).
Lenders are going to look at ALL your spending over the last 3-6 months to see if you are good with managing your money.
They are going to make a decision of whether you are a good risk or not by what you spend your money on.
For example, you might save some money, say $500 but next month, a bill comes in and you spend it. This will work against you.
Or, you decide to use Uber eats because you can’t be bothered cooking, Afterpay for the item on sale you had to have and you like to use the online better apps to have a flutter on your sports team winning this week.
Unfortunately, doing these sorts of things impacts your ability to borrow money and you become less appealing to lenders.
Let’s have a look at a bank statement to demonstrate the point:
This investor had the above all through their bank statement. Can you image the look on the Assessors face when they see lots of sports betting?
What about this?
Have a look at all the Afterpays, does it say that this borrower can manage their spending?
The impact is a potential decline of the loan.
Clean up your act before applying for a loan and make sure your statements (bank and credit card) are all squeaky clean for 3 months.
What you do after that is your business. 😊
If you want more tips and suggestions on how to get yourself bank ready and you haven’t download your copy yet…
Until next time, happy investing.