New to Australia and trying to learn …
1. How do I ascertain my credit score or equivalent?
2. I know lending criteria varies, but speaking in generalities, where can I acquire information as to what a good credit score is and approximations on how much I can barrow based on certain scores and salaries?
I feel totally overwhelmed here in Australia; how can I get started and how do people buy here? As an example, I have 0 debt, decent income, and reasonable savings. Before leaving the US I was approved for $750K loan. Here in AU my financial circumstances are not markedly different. So I wanted to get a ball park figure of what I could get in AU; I used Wizard's and ANZ's online loan estimators (no particular reason why, they just happened to come up first when I Googled "How much can I borrow?"). Wizard came back with $83,000 and ANZ with $235,000. WHAT?!
Living in Sydney I can't buy a dog house for $83K!
How are these numbers so vastly different on the same inputs and how are both SO much lower than $750K? Surely lending can't be THAT different?!
3. Does each time an inquiry in made into one's credit worthiness, does this adversely affect their credit score?
Thank you
NB. Just to clarify for those who say "Hey, you were approved for $750K, but you state you have 0 debt." I got the approval letter, but did not actually take out the loan as I did not find any property that fit my criteria.
This raises more questions:
Can I do pre-approvals here in AU? Where the bank agrees to loan me a certain amount of money, puts it in writing, and then I can take that letter and shop around?
Does getting approved for a loan, then not accepting the loan negatively affect your credit?
In Australia we have a credit reference agency, Veda Advantage, formally known as Baycorp. You can contact them at anytime to obtain your own credit file for free if you are prepared to wait 10 days (?) and if you want it instantaneously, you can purchase your file for $27 (?)
Every time you make an enquiry in reference to obtaining any type of credit, whether it be a post pay mobile phone, utility connection or a home loan, etc, an enquiry is placed on your file with usually the amount and the type of credit and the lender. If you file for bankruptcy or have defaulted with a lender, this will also show on your file. Also, whether or not you take the loan up or not, the enquiry stays on your file for 5 years and bankruptcy stays on your file for 7 years. An enquiry which hasn't proceeded looks exactly the same as a loan you have taken up on your credit file.
Every lender will enquire to Veda Advantage when you apply for any type of credit to assess your application.
If you have had numerous enquiries with various lenders in a short amount of time, this will only make it more difficult for you to get a loan, as the lender will be wondering why the other lenders have either declined you, or if you are just wasting time shopping around and getting approved with as many lenders as possible, then taking the best deal. People don't take you too seriously when they see a very active credit file and they think that you are just wasting their time.
On the other hand, if you have a new credit file, many lenders are nervous about lending to you, as they have no checkable credit which they can reference on you, seeing you as being more risky. In saying that, a 20% deposit always helps as this takes most of the risk away and there are plenty of lenders with various types of loans that will lend to you with a sizeable deposit.
As for online calculators, they are just a guide. You are better going in to see a mortgage broker as they should have a large panel of lenders finding something that fits your needs and they would be better to give you a more accurate amount which they feel they could get you approved on.
Also, you can get pre-approvals here.
You can either display your income, deposit etc here or contact me and I will help you determine how much you can borrow
Cales post covered most of what the banks look at. These days they often have automated systems, esp for credit card and personal loan apps, where they have points to various thing such as:
– number of enquiries in last 12 months
– number of address
– last known employer matching current
etcIts a good idea to try to keep the number of enquiries to a minimum so you don't look like you are desparately shopping for a loan.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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