There’s no doubt the Royal Commission has had an impact on how lenders now assess loan applications. You would’ve heard that right now it’s really tough to borrow money from the banks, but when a majority of a bank’s total income is derived from interest charged on loans, it’s important for them to keep lending.

So, let me give you some insights into what banks look for when assessing your loan application in 2019.

Make sure you keep track of your living expenses.

A lot has changed in the last few years on the lending scene, things like how much you spend weekly on Ubereats and your gym membership have become a concern for the banks. They no longer just rely on your credit file to understand your financial situation and make a character judgement, they look at hard facts and that means putting your bank statement under the microscope.

With the popularity of Paypass and the convenience of a cashless society, our bank statements reveal almost everything about our daily lives, where we eat, how often we eat there and how much we spend. Our bank statements act as a tracking device and can map our whole day from our morning coffee to our lunch meeting, after work yoga session and late night Uber ride home.

Based on this new ‘Big Brother’ tactic the banks can determine whether or not you can service a home loan simply by taking a look at your bank statement. Most mortgage owners would argue that they would curb their spending once they get a mortgage, but this is not always the case.

Make sure you’re meeting all your current financial commitments.

The banks now ask for the most recent statement for all your liabilities to ensure you are meeting the minimum repayments on your commitments. This is important to know as they don’t want to lend you more money if you can’t make repayments for what you currently owe.

Make sure you can prove savings when buying your first home.

Banks have requested savings history ever since I’ve been in the industry. It’s very important to show lenders you have the discipline to save money on a regular basis. I know it’s hard to save for your first home and still pay rent and some lenders recognise this. My tip, make regular deposits no matter how small.

So It’s not all doom and gloom when applying for a loan and it’s safe to say that banks are still approving them,  however be prepared to provide a lot more information than you bargained for.

Education is the passport to the future, for tomorrow belongs to those who prepare for it today. Malcolm X