Different companies have different criteria for loan application but there are some requirements, which remain the same even across the geographical boundaries. Credit Score is one such criterion and lenders use the score to determine whether they should give the loan to a person or not. Lenders will also carefully assess a borrower's merit by checking the track record for debt repayment. Because of the assessments that are required to be made by a lender before accepting a loan application, it is often difficult to quote a particular interest rate on the spot. The rates provided by lenders when you call them up are the standard or basic rates and the structure might change when you actually apply for the loan.
Lenders will primarily look at the following criteria while making your risk assessment:
APPLICATION
o Status of Employment
o Your current income
o Your overall credit history
o Your previous and current repayment record, which is normally over the past 12 months
Joint borrowers
There are times when home loans have joint borrower's i.e two people apply for the same loan like husband and wife. In such a case the lenders will assess the above criteria for both the borrower's and weight will be given to the annual gross income of each of the borrower.
Alternative loan market
In the last couple of years, new players have entered the Australian lending market and are offering home loans to borrowers who have not qualified for any of the standard home loans. These lenders form what is called the alternative market or even the sub-prime lending market. Due to the sub-prime lending market, borrowers now have plenty of choices and above all borrowers with bad credit history can also apply for and get home loans.
Low docs
Another interesting type of home loan in Australia's non-conforming loan market is the low-doc loan. This loan is normally offered to only self-employed people and those who are unwilling or unable to furnish complete documentation or details of their income. There has been an explosion of low-doc loans in Australia since 2003. These loans are available with non-conforming lenders as well as some of the mainstream lenders and this has considerably increased the type of loans available. Some of the other categories of loans being offered by the non-conforming market consist of loans that have been specifically targeted at retired borrowers in Australia as well as non-residents.
Criteria For Loan Application APPLICATION
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