Imagine the excitement of finding the home of your dreams and feeling like this is where some of your best memories will be born. Then picture how distraught you would be to hear that your home loan application was declined and the property is out of reach... 

Fortunately this nightmare doesn't have to be real. By understanding what not to do and preparing your application properly the process will be a lot smoother along with less hold ups, improving your chances of being approved.

Here's what our finance partners Resolve Finance recommend.

1. Shopping before finance

There is no point fantasizing and spending time looking at properties you cannot afford. It usually ends in disappointed but this heart break could have been prevented with a per-approved loan. By doing so your finance is basically already organized meaning you know exactly what you can afford to purchase and can shop within your budget.

2. Tarnished credit

All lenders have access to your credit file. It is a key consideration and can be a major stumbling block if it contains infringements. So before you submit anything obtain a copy for yourself first so you know what the banks will see, what can be cleaned up and if there are any errors to rectify.

3. Too many applications

In addition to above every time you make a home loan application, or indeed any loan application. it is also recorded in your credit file. However it doesn’t reveal if you were approved or declined. If you have many applications listed it will look more like the latter, which makes lenders feel nervous.

4. Not taking advantage of the first home owners grant

There are certain criteria which need to be met to be eligible for the Grant, so don’t automatically assume you qualify. Because if that’s not the case you may fall several thousands of dollars short. On the flip side it’s worth checking if you can take advantage if you think you can’t as you may be pleasantly surprised.

5. Underestimating costs of purchase

As well as the loan there are settlement costs, applications fees, valuation costs and more which need to be factored in. Be getting an idea of what to expect there won’t be a nasty shock waiting for you along the way.

6. Not exploring all options

There are so many different loan types available such as variable, fixed and split which all come with heaps of added features. So get to know what they are so you can understand what will work best for you.

7. Taking on more than you can afford

Just because you can service a certain amount doesn’t mean you have to. Make sure you have a buffer factored into your budget so that if rates rise, your lifestyle doesn’t have to suffer.

8. Interest rates aren't everything

The loan with the lowest interest isn't always the cheapest in the long run. There are also fees and charges on top which could make the finance more expensive overall than one with a higher rate. A effective tool is the comparison rate which factors in extra expenses, providing a greater indication of value.

9. Changing jobs

Lenders love stability so if you’re looking to change jobs – don’t! Starting a new job brings with it probation periods which you often have to complete before you will be considered for a home loan.

10. Not utilizing home loan repayment strategies

Once you have a home there are a range of simple techniques which will not only help you pay off your loan sooner but will also save you thousands in the process. So you don’t have to be stuck with what you get for the full length of the term.

While I'm not really that expert, I recommend you to read these two books before you step ahead. 
Book 1. How to Get Approved for the Best Mortgage Without Sticking a Fork in Your Eye: A Comprehensive Guide for First Time Home Buyers and Home Buyers ... Since the Mortgage Crisis of 2008 (Volume 1) 
Book 2. Mortgages 101: Quick Answers to Over 250 Critical Questions About Your Home Loan

This post has been republish with permission. Original post here