There’s been plenty of press about the tighter finance environment in the wake of the Banking Royal Commission and restrictive moves by APRA.

Rather than relying on sensationalist tales with clickable headlines, BeachSea thought it best to find our own reliable source and unearth the truth.

There are a few challenges investors are facing at the moment, but they’ve been overstated.

People just need to apply a bit more diligence and make a little extra effort, but borrowers with a professional on their team shouldn’t worry unduly.

There’s more paperwork on what you have to provide, but once you provide that then it’s a matter of your broker working out which lender is going to be suitable for your own personal situation.

We though we could give you five tips for smoothing the path and securing a ‘yes’ for your next loan application.

1. PAY ON TIME

Staying on top of your current loans is a critical first step for borrowers. Pay every loan payment on or before the due date.

The majority of lenders require statements on all your existing loans to ensure you do have excellent conduct on these – including credit cards, personal loans and home loans.

You can’t just say, ‘I won’t make the payment on this credit card this month,’ anymore because the banks will catch you out – they’ll see that and if you’ve got a blemish on your credit cards or missed payment, it does make it harder to obtain the finance for your next purchase.

It’s all part of showing you’re a responsible borrower and capable of meeting the current debts you have in place before you take on further commitments.

It’s pretty simple – if you’re wanting to borrow, you’ve got to show to a bank that you’re capable... and one simple move is to ensure that your current finances are up to date before you apply for anything else.

2. STAY ON TOP OF YOUR BUDGET

People are often surprised by the fact that good investment properties in locations with exciting drivers often cost as little as $2,000 per year to hold.

Loan applications have always considered your income versus expenses, but now banks want to also see a detailed household budget. We do admit lenders have become a little more rigorous in their requests, and now seek extra details via documentation as well as access to 30-day statements on your transaction accounts.

This is again why it pays to stay on top of credit card repayments and keep within your limits. If you have a credit card and your limit is $10,000, you must ensure you’re always under that limit.

On the income side of the ledger, not much has changed. Banks still require pay slips and previous tax returns.

3. ALLOW MORE TIME

While Sydney and Melbourne are currently experiencing market downturns, more than 50 per cent of locations across Australia are producing price growth.

While you shouldn’t be shy of the finance process, we recommend allowing extra time for approvals to be factored into any purchase negotiations. In Queensland, for example, you usually have a 14-day finance day period. We’re now suggesting you may want to get 21 days for finance if you haven’t seen a bank or broker beforehand.

4. BROKERS HELP

There is no denying mortgage brokers are worth their weight in the current finance landscape. The broker has to have an understanding of what the client’s needs are and whether that’s going to fit the lender’s calculators. Brokers can make the difference between on approval or no approval.

5. KEEP A POSITIVE MIND SET

Despite some trepidation by borrowers to make an application for finance, you shouldn’t be worried because, in the end, the bank wants to lend you money – it’s their business model after all and their shareholders are looking for a profit. You just need to plan a bit more in advance so you’ve got clean numbers for the lender.

Our finance partners provide investors with guidance. We let them know what they need to do over the coming three or six months to be in a position to get finance approved for an investment property. It could be as simple as clearing that credit card or paying that personal loan out so it doesn’t impact on your application. It might also be a matter of being in a job for another three months if you’re casual or part time.

Additionally an important attribute to all good investors is having the right mindset plus understanding property market fundamentals and being able to see through the noise. If you’re going to borrow, you’ve got to do it right. It’s a matter of being organised and then working with that broker to do exactly what they believe you should be doing to enable the next phase – the approval