More than you might think!
The new CCCFA (Credit Contracts and Consumer Finance Act) rules implemented in 2021 have been a total game changer for potential kiwi borrowers.
You have only one shot to make a first impression, so you have to put your best foot forward, and an interview (submitted application) doesn’t mean you’ll get accepted. Your recent work (financial) history speaks volumes as to whether or not you are what the bank is looking for.
Much like a prospective employer, the banks need a position filled (that of good client). They might give you some incentives if you are the right candidate (cash contributions). There are a lot of applicants in the open call for mortgage holders, and you are up against a lot of competition, hundreds maybe thousands of other applicants!
How will you beat out that competition? Where do a lot of applicants fall short these days? What is stopping THEM from beating out the competition?
Your recent work (financial) history is important. How does your track record prove that you are the best person to make a commitment to.
Does your last 3-6 months of bank statements show any of the following?
- Late bill payments
- Overdrawn accounts
- Laybuy or Afterpay purchases for concert tickets or luxury items
- Does your budget always blow out, you rarely end the month with a surplus to put into a savings account?
- Are you trying to buy things before you can afford them?
- Do you have a great savings history, but also a high level of personal debt?
Did you answer YES to too many of the above?
Well sorry, the bank doesn’t want you to apply just yet. However…
We will help you represent yourself as best as possible when you get in front of the interviewer (the dreaded credit control!)
Meet your recruitment manager, Vanessa Belton! She’s here to assess your situation. Maybe get you need some extra training so you have the right skills for the job ahead (30 year mortgage commitment!). Perhaps your situation is complicated, but you are still qualified!
Regardless of your financial position you will need to explain every cent you are spending, and often justify cash withdrawals and one off spends. We have industry smarts and leading technology to help you prepare for this. We will give you advice around the likely results your current financial position will get you from the bank, and what results you may get if we work on your financial skills for a few more months.
- Is Afterpay or Laybuy purchases your Achilles heel?
Did you know that a $400 per month laybuy/afterpay purchase can reduce your ability to borrow by $50,000? Get rid of them, have none in your recent financial history unless you can show they are a one off emergency expense, eg: dental fees or car repairs.
- Is your budget constantly blowing out?
You need to reassess your budget expectations to realistic levels, and analyse unnecessary spending. Did you know that food bills can account for a quarter of household expenses? Reducing your food bill by $50 per week would save you $2,600 in a year. Could that make the difference for you being able to pay bills on time, save extra funds, and keep your accounts within their limits?
- Are you in a partnership where one of you hasn’t managed money well?
Keeping the lines of communication open and being honest with each other is the most important thing. We can talk to you about your situation and develop a plan together to achieve your mutual goals.
Much like a prospective employer wanting to know how your commitment to the job will be effected by unexpected changes in your life. The bank wants you to show how committed you can be to their interests.
They want to know you can pay back that money even when:
- Interest rates rise
- You have unexpected expenses pop up
- House values drop
In applying for a job, a question that always gets asked at some point is: tell us about a time when you encountered a challenge, or what are areas you feel you could benefit from further development? We all have negative factors affect us, most of the time beyond our control. However your ability to be resilient is noted and valued by the bank. As is your honesty!
How are you showing you are the best candidate for the bank to approve? Get in touch with Vanessa now to get a free financial evaluation!
