Tip for First Home Buyer: Bank viewing your risk profile

Ensure all current commitments/bills are paid on time

When the lender is considering your application, they are assessing your risk profile and part of this is your willingness to repay. Showing that you can pay things like your rent, or any other bills you receive, on time assures the bank that you have a low-risk profile.

As much as you can, avoid being late on your credit card payments or any other loan you may have and do not charge excessively to your credit card either. You need a track record of fiscal responsibility and show that you can manage your money.

Simple little bills such as unpaid phone accounts can now prevent you from getting a home loan as it is seen these days as a lack of financial discipline. Zippay, Afterpay and other “buy now pay later” schemes can also impact your assessment outcome.

Establish a constant record of paying bills on time. When applying for a home loan, most lenders will want to review how well you have handled your credit in the past. This includes all credit accounts, utilities, revolving debt (e.g. credit card), and instalment debt (car loans, student loans, etc.).

It is critical for you to bring all overdue bills up to date immediately and begin paying them on time in a consistent manner.