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Applying for Finance
Financing is one of the least understood aspects of investing, yet most people seem to think that they don’t need any additional education in this area.
When you apply for finance, there are three main categories your lender will consider.
They are The 3 Golden C’s:
Character - Takes into account your past credit history, including any defaults or judgements that may be lodged against you. They also consider how many loans you have applied for in recent times.
Capacity - Is the assessment of the applicant’s ability to service or repay a loan.
Collateral - Is what usable equity you have in your home or other real estate investments. We say useable equity, because in some cases it may be beneficial to utilise mortgage insurers and get 90% against the value (if your equity position is weak).
Generally speaking, most applicants are weak in one or more of the Three Golden C’s.
Strengths and Weaknesses
Now that you have looked at your Three Golden C’s, you will be able to see where your strengths and weaknesses lie and you will be able to plan ahead to make the most of your strengths.
Bad Credit History Notes
A poor credit history does not mean that you are not able to get finance, it does not matter if it is as small as $1,000 from a credit card or discharged bankrupt – you DO have options.
Getting Market Ready
For each person, preparing to buy property is as individual as you are. Click on one of the options below which best describes your situation: First home buyer Owner/s of one or more houses