Get serious about your home loan

Not many of us can afford the home or investment property of our dreams on one income, which is why more people are choosing to apply for joint bonds. Whether you’re one half of a couple or part of a group of financially savvy friends, joint bonds can be the key to some great investment opportunities.

Just because there are more of you doesn’t mean you can slack off when it comes to bond application time. Polishing your financial profile is just as important for joint bond applicants as it is for individuals.

Here are tips on improving your chances of approval by making yourself (and your co-applicants) look as good as you can.

Ditch the debt

Debt is one of the first things banks look at when it comes to assessing bond affordability. It doesn’t matter how many applicants there are, any bad debt will count against you.

To qualify for the largest bond at the best interest rate, get rid of any unnecessary store cards, credit cards and loan accounts. If you can tighten your belts to pay off things like car loans, even better!

This shows you have sufficient disposable income and are serious about your financial health.

Build a strong financial history

Clearing bad debt is important, but a record of good debt is an equally powerful tool.

Banks like to be able to see that you have a history of paying what you owe timeously and responsibly. A good financial track record really does count in your favour.

If none of your co-applicants has had a loan, store account or credit card, you may want to consider opening a credit account purely to build a positive history.

Of course, it’s important not to fall into the trap of using credit unwisely. Keep your eyes on the prize – your home loan – and treat any credit facility responsibly.

Put your best foot forward

Chances are, one person’s financial profile will be stronger than the other(s) on a joint home loan application. Whether that’s because of a higher income, better credit record or more stable employment, it makes sense to play up those strengths.

It’s smart to make the most attractive applicant the primary applicant on your joint home loan.

Think of it as putting your best foot forward, to give the banks a good first impression.

It’s not going to make up for any serious black marks on other applicant’s records, but can help boost your overall profile enough to encourage lenders to come to the table with their best offer.

Ria Venter, regional manager for Rawson Finance