If you want to borrow money, especially for a home-loan, you may have noticed lenders are asking for more detailed information about your financial situation. The Credit Contracts and Consumer Finance Act now requires lenders to implement more stringent lending criteria to ensure that borrowers have sufficient funds to repay their loan now, and in the future.
Here at Budgeting Services North Canterbury our fully qualified Financial Mentors can help you understand how the new rules apply to you, and help you get your paperwork in order. Lenders will investigate your previous three months’ worth of transactions through your bank accounts as they want to see evidence that you manage your money well. The lender wants to see that you have good money habits such as staying in credit on your accounts (even if you do have an agreed overdraft facility). They want to see that you are paying your bills on time, that you don’t exceed any agreed credit limits and that any debt repayment arrangements are also current, with no arrears. If you are able to show additional savings over and above your Kiwisaver it shows you can comfortably live within your means.
Together we will discuss your income and household expenses and how you might need to look at some of your spending to ensure that you can show you have sufficient funds to repay a loan, even if the interest rates were to change in the future. We can help you re-negotiate some of your existing debt repayments with creditors to help free-up funds for repaying your new loan, and discuss other ways to help you improve your overall financial situation. We’ll work with you to prepare a Budget which shows all your income and expenses, and which also demonstrates you can afford the repayments for your new loan. We’ll help you complete the application paperwork and get all your documents in order ready for submission to the lender. Our services are free and totally confidential, and you’ll always work with a fully qualified Financial Mentor. Get in touch today to see how we can help…
Sorted has also written a great article on what the new rules mean, go to https://sorted.org.nz/must-reads/heres-what-the-new-lending-rules-mean-for-you