Going About Joint Bonds
Not many of us can afford the home or investment property of our dreams on one income, which is why more and more people are choosing to apply for joint bonds. Whether you’re one-half of a couple or part of a group of financially-savvy friends, joint bonds can be the key to some great investment opportunities.
Of course, just because there are more of you doesn’t mean you can slack off when it comes to bond application time. According to Ria Venter, Regional Manager for Rawson Finance, polishing your financial profile is just as important for joint bond applicants as it is for individuals.
Here are her tips on improving your chances of approval by making yourself (and your co-applicants) look as good as you possibly can.
Ditch the debt
Debt is one of the first things banks look at when it comes to assessing bond affordability. It doesn’t matter how many applicants there are – any bad debt will count against you. To qualify for the largest bond at the best interest rate, Venter highly recommends getting rid of any unnecessary store cards, credit cards, and loan accounts. If you can tighten your belts to pay off things like car loans, even better!
“Ideally, you need as few expenses coming off your bank accounts each month as possible,” says Venter. “This shows the bank that you have sufficient disposable income and that each of you are serious about your financial health.”
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Build a strong financial history
Clearing bad debt is important, but Venter says a record of good debt is an equally powerful tool for looking good on your joint bond application.
“Banks like to be able to see that you have a history of paying what you owe timeously and responsibly,” she explains. “A good financial track record really does count in your favour.”
If none of your co-applicants has ever had a loan, store account or credit card before, you may want to consider opening a credit account purely to build a positive history. Of course, it’s important not to fall into the trap of using credit unwisely – keep your eyes on the prize of your home loan and treat any credit facility responsibly.
Put your best foot forward
Chances are, one person’s financial profile will be stronger than the other(s) on a joint home loan application. Whether that’s because of a higher income, better credit record or more stable employment, it makes sense to play up those strengths.
“It’s smart to make the most attractive applicant the primary applicant on your joint home loan,” says Venter. “Think of it as putting your best foot forward to give the banks a good first impression. It’s not going to make up for any serious black marks on other applicants’ records, but can help boost your overall profile enough to encourage lenders to come to the table with their best offer.”
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