One of the key factors to getting approved for a home loan is how you run your bank accounts.
Due to responsible lending legislation banks have become extremely pedantic when it comes to the small detail. What might seem irrelevant to the applicant can actually make or break an approval, especially if you're a low-deposit and Welcome Home Loan borrower with less than 20%. But even those with a good deposit of more than 20% will have their bank statements closely scrutinised.
Firstly, the banks are getting tougher on checking that your expenses listed on your bank statements are inline with what you have declared in your mortgage application from. It's important to carefully check your statement transactions are realistic compared with what you have declared. It's almost human nature to under estimate expenses, so pay close attention to what you are actually spending before declaring it on a form.
Unarranged overdraft fees, late payment fees and bounced APs and DDs are a real killer to an application for a mortgage. Avoid being lazy on how you run your accounts, as multiple unarranged overdrafts when your account goes into the red can make or break an approval.
As mortgage brokers we regularly coach people to get prepared, and that often means working hard for 3-6 months on keeping their statements clean of any hiccups before we submit an application to a bank. Being as prepared as possible will improve chances of approval. That includes checking through your bank statements for any APs on small debts you may have forgotten to declare. Even if you run a credit card and pay it off monthly, always declare the limit on the mortgage application form.
If you have savings then make sure you provide a nice clean history of regular saving evidenced with at least 3-months savings statements.
Seek advice from an experienced mortgage broker so they can check things before a bank starts an assessment of your financial details.