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Meet "Mr Perfect", the guy banks would love to lend to

To lenders, Mr (or Ms) Perfect is not someone who enjoys sunsets and long walks on the beach. They are someone who is reliable, well-educated, market savvy and focused. They are someone who knows that buying in property is not a spontaneous decision, but a long-term business investment.

In case you were wondering if you’ve got what it takes to woo the banks into approving your home loan, here are a few of the qualities most will always look for in an applicant.

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Mr Perfect has a good job and pays his debts

If you’ve ever entered into a mobile phone plan, taken out a personal loan, or owned a credit card, you will now have a credit file that lenders will scrutinise when deciding whether or not to approve your loan.

Defaults on loans, overdue or missed payments, and other kinds of black marks on your credit file will all count against you when applying for any type of loan. Mr Perfect has no black marks whatsoever on his credit file.

Additionally, lenders love investors and loan applicants who are financially independent - meaning they have their own stable source of income, and don’t rely on loans from other people to sustain themselves - and who have a good savings history. To them, Mr Perfect is someone who can be counted upon to pay back the money they lend them.

Looking to get started on a excellent financial planning but have no idea where to start? Have a look at this guide to How to keep your financial planning on track.

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Mr Perfect is not flaky

Generally, it’s not enough to demonstrate that you are good with money to persuade a bank to lend to you. You need to be able to prove that you have good character, as well as a good credit history. Simply being a ‘nice guy’ isn’t going to cut it.

Mr Perfect has a strong, consistent employment history. Someone who has worked for the same company for 20 years is seen as being less of a financial risk than someone who has consistently had trouble holding down a job. A strong employment history also further demonstrates reliability.

Lenders also often look at an applicant’s living situation. Living independently in a good-sized apartment in a reputable location, or being married with two kids and living in a spacious home in the suburbs, will likely reflect better on you than if you lived in a share home with five friends, or still lived at home with your parents and didn’t pay any rent money.

Importantly, they’ll want to clarify that an applicant has no criminal history. This is a big one. Some lenders may reject your application before even meeting with you, just by seeing that you’ve got a criminal record.

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Mr Perfect has researched the market

man-researching-on-laptop While the high school you went to probably won’t matter much to the bank, your overall education will. Mr Perfect will be intelligent and well-read, however banks will want more than book smarts. They will look for someone who has done their research, and has come to the table informed about what exactly they’re hoping to get out of their bank and their loan.

Researching different kinds of loans, investigating the rates and policies of all different banks before deciding on a specific one, and staying on top of (but not being obsessive about) current market trends will show a lender you’re serious about becoming an investor. Walking into a meeting with a lender you’ve chosen at random, with no knowledge of what you’re really doing there or what their policies are, won’t do you any favours.

Additionally, lenders will love a hopeful investor who has thoroughly researched exactly what kind of property they want to invest in, where that property is, and why it will be a good investment for them. Having a long-term plan in mind for your property investment will show you’ve seriously considered it, including the potential risks involved, and didn’t just wake up one morning and decide to throw money at a house because everyone else was doing it.

Need expert advice but don't know who to ask? We've done it for you. Have a look at these 5 expert tips towards buying a house.

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Mr Perfect has long-term goals

While we’re on the topic of having a long-term plan in mind, lenders will love a hopeful investor who has the patience to see that long-term plan realised. Seeing a return on your investment will take time - years, even. Lenders won’t want to give money to someone who gives up on their investment after the first year because things aren’t moving along as quickly as they’d hoped.

Mr Perfect will set goals for himself. He will know how much he wants to get out of his investment, and the deadlines he wants to have achieved this by. He will remain focused on these, and won’t be put off by fluctuations on the market or by what everyone else is doing.

Sometimes it's easier to hop on the property ladder by investing. Find a great investment loan rate with Lendi.

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Important legal stuff

COMPARISON RATE WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years.
Lendi is the trading name of Lendi Pty Ltd, a related body corporate of your licensed credit assistance provider, Auscred Services Pty Ltd (ACN 164 638 171, Australian Credit Licence Number 442372). We will never sell your email address to any third party or send you nasty spam, promise.
EXAMPLE: This example is current as at 20th October 2016. A Click Loans Online Principal and Interest Loan of $150,000 over 25 years has monthly repayments of $767. This is calculated based on the interest rate of 3.69%, comparison rate of 3.69%, upfront fees of $0 and annual fees of $0.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria.
Lendi is a privately owned and operated Aussie business. Our mission is to provide Aussies with the right experience when choosing a home loan from our panel of major and non-bank lenders including Click Loans which is a wholly owned subsidiary of Auscred Pty Ltd and a related body corporate of Auscred Services, your credit assistance provider. Although Lendi compares over 1600 products from over 30 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. While Lendi is 40% owned by founders and employees, we have also been supported by some great minority shareholders including Bailador, Macquarie Bank Ltd and a number of Australian sophisticated investors. We have an independent and founder led board.
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