How Lenders Assess Your Home Loan Application
What Do Banks Look For When You Apply for a Mortgage?
Applying for a home loan can feel overwhelming—especially if you’re unsure what lenders are looking for. Understanding the key factors can help you prepare and improve your chances of approval.
The 5 Key Factors Lenders Consider
1. Income and Employment Stability
Lenders want confidence that you can meet repayments. They’ll check:
- Your salary and any additional income streams
- Employment history and job security
- Whether you’re full-time, part-time, or self-employed
2. Expenses and Financial Commitments
It’s not just about what you earn—it’s about what you spend. Lenders review:
- Living expenses (groceries, utilities, childcare)
- Existing debts (credit cards, car loans)
- Subscriptions and discretionary spending
3. Credit History
A strong credit score shows reliability. Lenders look for:
- On-time payment history
- Any defaults or missed payments
- Number of credit inquiries
4. Deposit and Savings Habits
A healthy deposit reduces risk for the lender. Consistent savings habits signal financial discipline and improve your chances.
5. Loan-to-Value Ratio (LVR)
LVR compares the loan amount to the property’s value. A lower LVR (e.g., 80% or less) is ideal because it means you’re borrowing less relative to the property’s worth.
Other Factors That Can Influence Approval
- Property type and location
- Owner-occupied vs investment loan
- Current interest rate environment
How to Improve Your Chances
- Pay down existing debts
- Build a strong savings record
- Check your credit report for errors
- Work with a mortgage broker for tailored advice
Ready to Apply?
At https://cbmmortgages.com, we help you prepare your application and find the right lender for your situation.
👉 https://cbmmortgages.com/first-home-buyers/Explore our First Home Buyers page
👉 Read more on our blog posts here
👉 Go to our dedicated First Home Buyers Page here
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📞 Contact us today to start your home loan journey with confidence!
External Resources
Disclaimer
This article provides general information only and does not constitute financial advice. Always consult a qualified financial advisor or mortgage broker before making any financial decisions.
Written by Craig McDonald 08.10.2025
