Before you fill in a home loan application, it is a good idea to understand exactly what the ‘ideal’ home loan application looks like so you can ensure you run into any road blocks during the process.So what does the ideal home loan application look like? The quick answer to this question is detailed…!

A home loan application can extend to as much as 10 pages and requires a high degree of preparation prior to submitting it for approval. Here are some tips to ensure your loan application is successful:-

Get your financial house in order

If you have outstanding debts like credit cards, it will be important to reconcile and even consolidate these debts prior to applying for a home loan. Don’t miss credit card payments in favour of a larger deposit. Significant debt can mean less favourable loan terms.

Review your own Credit Rating

Apply to Veda.com to get your own credit rating report in advance of applying for a home loan. Your credit rating is a number that lenders refer to when they are determining your creditworthiness. It typically refers to any credit that your have either applied for or been given over the past seven years. This means that is updated, not only when you default on a payment but also when you apply for any credit - be that credit cards, store cards and so on.It is very important that you are proactive with your credit rating. Knowing the details of your credit score is the first step. By accessing your credit report from veda.com, for a small fee - you will be in a much better position to make sound financial decisions and plan for your future home loan application.

Prepare all your documentation in advance

Whilst your mortgage lender will be able to assist you with the details of the application, it is a good idea to start early by preparing your documentation in advance. Start with your 100 points of identification, then calculate your assets and liabilities to start building a picture about your current financial situation. Don’t attempt to gloss over any details, especially any outstanding credit store cards or student loans. The last thing that you want to happen is to have your loan application rejected because of an undeclared debt.Ultimately, your ‘ideal’ loan application should look something like this.

• Credit history of over two years - a steady history of on-time payments in a range of areas such as credit cards, personal loans or car loan payments.

• Credit cards not maxed out - with credit to spare.

• Employment history - two years with no gaps is ideal, preferably in the same line of work.

• No late payments on any home loans held by you. A borrower, who has made regular payments, will be seen as a valuable customer.

• As a general rule of thumb, liabilities should not exceed 42% of your income - liabilities include car payments, credit card debt, student loans, spouse/child maintenance, personal loans, HEX fees and other home loans.

• The value of your assets should equal at least two months mortgage payments, including principal, interest, taxes and insurance.

If it doesn't, then don’t panic because that is what your Mortgage Specialist is here for. So whether you are looking to buy your first home, refinance and existing loan, or invest in property, your Collins Home Loan mortgage broker can help with all the paperwork and provide you with tips and strategies to prepare the best possible loan application. With access to loans from over 30 AAA rated lenders, Collins Home Loans will be sure to find you the best deal to suit your needs.

A good place to start is by collating your information using our Client Details Form - which takes you through all the elements of the application process. The good thing is that you can save your details at any stage during the application process and then come back to it any any stage via a link supplied to you via email. This form is not considered as an application, rather a tool to assist you and understand your financial position.