Loan Applications – Living Expenses
Yes, we all expect lots of questions and paperwork when getting ready to submit a loan application. Sometimes though, the questions that need answering can feel pretty personal, especially those regarding your living expenses. After all, some of the things we spend money on regularly are so much part of our daily routine that we don’t even think about them such as grabbing a coffee and muffin while we’re paying for petrol on the way to work.
When assessing your eligibility to service a loan, the lender has to take all of the variables into account. Afterall, most people when taking out a loan or mortgage are purchasing a home which generally is the largest expense most families will have. A home loan or mortgage is also taken out over a number of years so the lender needs to ensure that your spending habits now will reflect your ability to be a responsible borrower.
Living expenses generally include things like, rent and utilities, insurances, groceries, clothing, child care/school fees, car and transport expenses. More recently though, lenders have been looking at other types of spending including travel, credit card spending, shopping and alcohol. While this might seem like an intrusion into your private life, due to recent changes in lending responsibility, banks are now required to make sure that they do business with borrowers who are reasonably able to meet their repayment schedule.
If a home loan or mortgage is on your radar for the near future and you’re unsure about whether or not your current discretionary spending will meet a lenders criteria, why not book a meeting or call with Annette and she will be able to go over in detail what the banks are looking for and how to go about getting your spending record in order. Alternatively, check out our budget planner on our website Click Here
Need some Advice about loans?
A mortgage broker can help you find the right loan and secure the finance that’s most suitable for you. It will also ensure you avoid making mistakes.
Any questions you may have regarding loans, contact Annette Tothill on 0420 973 551.