Living in the digital world means living with apps, but what if some of those apps and services had real world ramifications? They just might.
Applying for a home loan has become more complicated as home loan lenders do their homework better than ever before. There’s little surprise that a lender will do due diligence on your financials when you ask them for a large quantity of money, and some of these checks may include services you might not expect.
For instance, if you order from food delivery sources, a bank may judge that you’re throwing money away, potentially turning you into a problem customer for a lender, and making you a weaker candidate for larger assistance in home financing.
That means services like Uber Eats and Deliveroo are being included in analysis by banks, as are services and websites reporting your details of online spend. Every time you make a purchase, it is tracked and is another detail banks and lenders can use to analyse whether your ability to pay back a loan can be trusted.
While ordering from an online service once every so often is unlikely to garner you any serious troubles, it’s the frequent ordering that may land you an issue or two, resulting in what the bank would call irresponsible spending, especially in the grand scheme of your financial stead.
This falls under a bank’s credit check through comprehensive credit reporting, which provides more information than ever about what you spend and pay for, with a strategy on minimising expenses able to garner a positive outcome.
Every time you spend on dinner or goods, you’re increasing your expenditure, and potentially hurting your chances to get a home loan. That means buying ingredients in one big shop up at the beginning of the week can look more fiscally responsible than spending nightly on food.
“In the past banks would work out a multiple of your income, less your big stuff like car debts and exposure to credit cards. Now, they’re looking at your bank statements to see how often you have takeaway food,” said Gemmill Homes Managing Director Craig Gemmill.
“APRA want increased security on the amount the banks are lending to home owners, so the balance has shifted. The banks haven’t changed their guidelines, but they are just applying them far more stringently now,” he said.
“It’s not just a simple process anymore. Technology has been a real game changer. No one uses cash, so everything can be tracked when you use your cards.”