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4 things you can do to increase your chances of a loan approval

4 things you can do to increase your chances of a loan approval

  • 06 Jul 2021
  • Jennifer Sharrock

With credit tightening for property investors for well over a year now, making a strong case in your loan applications has never been more important. To make a strong case in your loan application, there are a few things you can do. Here's our list of what you can do to make the strongest case possible and increase your chances of a loan approval.


Do your research and shop around

Make sure you research rates through traditional banking channels and mortgage brokers to find the best rate possible for your financial situation. Remember securing a loan isn't always about the interest rate. With credit tightening for property investors, your Loan to Value Ratio (LVR) will be crucial in determining your interest rate. To calculate your interest rate, the lender will divide the amount of the loan you require by the value of the property. Naturally, the greater the LVR, the higher the risk you represent to lenders. This will change the array of loan products available to you.


Pay down personal debt ASAP

To improve your credit rating and overall financial position, paying down personal debt should be your first priority. For property investors needing finance, this is particularly important. This is because paying down personal debt frees up your income which puts you in a stronger position to service your property finance.


Decrease and closely monitor discretionary spending

It has been widely covered that lenders are now looking at applicants' discretionary spending habits as part of the loan application process. For at least a few months before you submit a loan application, aim to decrease your discretionary spending on things such as restaurant meals, Uber Eats, clothing, consumer products, and other discretionary lifestyle expenses.


Obviously, you don't want to sacrifice enjoying yourself in this process, so if you can't go without your weekly Uber Eats night, you could also demonstrate that you budget for lifestyle expenses by setting a specific amount aside each month and not going over it.


Refinance a current loan

If you've had a Principal Place of Residence loan for at least 5 years, you may be able to refinance your current balance over a new 30-year period. This will reduce your repayments, freeing up more of your income to service a loan on a new investment property.


While it can be discouraging to get knocked back for a loan, remember it's not an uncommon occurrence in the current credit market. Being proactive about strengthening your financial position, budgeting and putting yourself in the shoes of lenders and brokers will help you make sure you present yourself as a desirable loan applicant.


This article is for general informational purposes only and must not be taken as legal, financial or any other professional advice.   We recommend obtaining advice specific to your situation before making decisions relating to your investment property and financial position.


PS: What a client had to say;

I would also like to take this opportunity to thank you for being an amazing property manager, it has been an absolute pleasure dealing with you and you are an amazing women. Thank you for being you, we all think you are awesome.
I would also like to wish you and your Family a very Merry Christmas and a safe and Happy New Year.
Looking forward to 2017, I hope you are too


Jodie King & Chris Nugent

- Jodie King & Chris Nugent
Mango Hill

Lance Field

I have known Jennifer for 8 years, I first met her when I needed to list my property for sale.

The property was situated at 11 Alice Street Mango Hill, Queensland.
From the start she was very friendly and professional, I was working away at the time and had no-one to look after the pool and garden while I was not there which made attracting potential buyers very hard, but through persistence, road blocks and other unseen forces Jennifer eventually sold my property.

Jennifer is a very hardworking professional and caring agent, there are no smoke screens or false promises from her, not like other agents.
I would highly recommend Jennifer to look after the sale of any property.
Thank you again for all the effort you put into selling my place.

- Lance Field

Robert and Gaelle

Hi Jennifer

Just a short note to say thank you for acting on our behalf in the sale of Grayling Court house.

Behind the scenes, the sale was comparable to a Cecil B. DeMille production of The Ten Commandments.

Thanks again,
Robert and Gaelle

- Robert and Gaelle