Mike Flook’s 4 Tips to Ensure Your Mortgage is Approved the First Time Around

Buying a new home should be one of the most exciting periods of your life so it can be a disheartening blow when things don’t go to plan. Too often I have seen people with a clear plan and vision for what they want in a home, then faced with the heartbreak of a declined mortgage. Luckily, there are a few things you can do to help your mortgage application process.

Be Careful if You Have an Unusual Work Arrangements

Banks are stringent with job stability rulings and often people aren’t aware that switching frequently from one job to another can hinder your chances for approval.

But don’t let that stop you from purchasing the home of your dreams, there are other options for those that don’t have stable employment; contractors, agency workers with multiple part time jobs and freelancers. Modern home loan lenders are beginning to understand that in the current economy, not everyone has a 9-5 job and not everyone can prove their income as easily as they’d like to. There are many home loan lenders that are willing to lend to individuals that don’t have a regular pay cheque. is a valuable resource with an array of information on applying for a home loan when you have an unusual work arrangement.

Contract, agency and freelance workers may be declined by the banks but there are lots of other options available for attaining finance. Image: Tim Wright

Avoid Nasty Credit Surprises

This one may go without saying but make sure your credit record is clean! Even the smallest of debts can disrupt your application process. For example, I have a friend who applied for a mortgage and was denied because of a $500 credit card he had taken out a decade ago and completely forgotten about. He paid the card off that day, however, could not apply for another mortgage for the next six months. It was an inconvenient and disheartening hitch that could have easily been avoided.

Ensure you have all your loose ends tied up before submitting your application because even the smallest mark on your credit record can hold up the whole process.

Avoid nasty credit surprises by tying up loose ends before applying for your mortgage. Image: ABC News.

Debt to Income Ratio

Make sure that your debt to income ratio is comfortable. This is important as you’ll want to know how big of a burden this new mortgage will be on your day-to-day living. As a general guide, once your debt/income ratio creeps above 30%, you will feel a strain on your budget.

You can calculate the amount you owe compared to the amount you earn by following these simple steps,

  1. Calculate all your monthly debt payments – including credit cards, mortgage and child support.
  2. Take your gross annual wages and divide them by 12 to get your monthly income.
  3. Take your total monthly payments and divide them by your monthly income.
  4. Turn that number into a percentage and that’s your debt/income ratio!

Shop Around

Simply not considering all your options in the first place could derail your application. Different lenders offer vastly different loan amounts: Lender 1 may lend you $530,000, while Lender 2 will offer $570,000 and Lender 3 may not approve your home loan at all.

This is why I recommend being proactive and hunting around. Don’t limit your search to just one or two lenders!

Finder is a great site that can help you shop around for the best home loan to suit your needs. uses information about your needs to compare the different home loans available in Aus.

Contact Me for More Info

I hope this guide is helpful to anyone out there that is looking to purchase a new property. The home search process should be exciting and fun and at Robinson, we will do everything possible to take away any unnecessary stress for you.

If you would like further information on accessing finance for a new home or the property market in general, please do not hesitate to contact me for a chat.

Thanks for reading and good luck on your Real Estate journey!

Mike Flook

Mike Flook

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