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You’re ready to take the plunge on your next purchase.

You know what you have and what you need.

You go to the bank. They can’t give you what you need.

Back to the drawing board. Sounds familiar?

Break the cycle and start on the right foot this time. Here are 5 smart ways to prepare and increase your borrowing power and work your loan to its maximum potential.


This will not only help control your debts and expenditure but also boost your savings and deposit. Make a list of all your income and expenses and highlight where you could optimise both. Some starting tips to consider are to compare your existing insurance deals and service providers, replace restaurant meals with home-cooked meals, or hit the pavement rather than incurring gym fees.

Control your debts.

Before approaching your lender, aim to pay off your credit cards. If you have more than one, evaluate whether you need them all, especially if you regularly are charged interest in purchases. Furthermore, avoid entering into long-term credit plans such as “Buy now, Pay later” offers. Your lender will look at all this as part of your debt that needs servicing and will therefore reduce the amount you can borrow.

Update your financial records.

Ensure your tax and financial records are all up-to-date. This will give your lender a genuine snapshot of all your assets, income, financial history, your capacity to pay, as well as your ‘character.’

Be mindful of your spending, most specially 3 months before an application.

Watch your spending, such as online shopping, Uber eats, and betting, as this will be taken as a snapshot of your regular habits.

Check your credit rating.

A poor credit rating will most likely result in you having your loan either rejected or substantially compromised so, best to check this before commencing the process with your lender. Equifax, Experian, or Illion are the main credit bodies who will provide you with an in-depth report, as will most credit repair agencies too.

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Now let’s hear those questions from the crowd…

  • What is all the talk about ‘Responsible lending’ laws and how will it affect my borrowing power?

These laws were introduced to prevent lenders from encouraging people to borrow money they can’t afford. Earlier this year, there were discussions about amending this law to encourage less ‘red tape’ and make it easier to borrow money. However, it has not eventuated. Lenders still must go through a series of checks and disclosures and abide by their Best Interest Duty (BID) obligation, which ultimately protects you as the borrower from committing to something that you cannot service.

  • Can I do anything to change my poor credit rating?

Depending on why you have a poor credit rating, you may decide to seek out a credit repair company that can fix this for a fee. Alternatively, as a general rule of thumb, after 5-7 years of ‘good credit’, your rating should improve by default.

  • I may need to take a longer mortgage term to reduce my monthly payments. Can I still pay off my loan earlier should my circumstances change?

This will be dependent on your loan product and whether you have a fixed or variable rate. Sometimes there is a break fee when your loan is paid off before the end of the fixed term. This fee is often being determined by the value of the loan. And this is where a broker can help match you with the most suited loan product, giving you flexibility when and how you need it.

Purchasing your dream home or diving into a new investment could look easy for some and confusing for others. But what most success stories always tell us is that the experience is way better and a lot more enjoyable with the help of a mortgage broker who can find a tailored loan that is aligned with your circumstances. So, take the bull by the horns, get prepared, and give yourself the best shot at achieving your financial goals.

Thanks for reading. Watch out for more articles and updates from Lendstreet.

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