Columnist Peter Boehm

When you're on that first romantic date, you want to make a good first impression. From your clothes to your hair and your opening line, a little planning and preparation can go a long way.

The same applies when you meet your home lender. With lending requirements becoming stricter, loans are by no means guaranteed. But the better impression you can make, the more likely your lender will be to grant you a loan, and the idea is to present yourself in the best possible light.

How can you make yourself attractive to your lender? Here are the top ten tips:

1. Approach your lender directly

There a many ways to contact a lender - through a branch, a lender's mobile lending manager or even a mortgage broker. Whichever option is most comfortable to you is fine.

However, while the major lenders, including the big banks, support all types of introductions, the type they seem to prefer is the direct one - an enquiry straight to their business or by direct referral.

The reason is that they prefer to be involved from day one. The advantage for you is that you deal directly with the person who can authorise the loan.

2. Be honest

In any partnership, honesty is always the best policy. If you withhold information from your lender or say something that isn't true, the chances are you'll be found out.

When you are, your loan application will be dead in the water. So be open and honest - your lender will be accommodating if they believe you can be trusted.

3. Don't play the field

Anyone looking for a long-term relationship will be turned off by someone who looks like a ‘player'. The same goes for home loans.

Loan applications show up on your credit file. If a lender sees a long list of applications, they might reasonably assume that you're desperate or that something is wrong.

Be selective in the lenders you approach and approach as few as possible.

4. Bring a big deposit

Lenders are excited by unencumbered equity. While your ability to meet your repayments is always their first consideration, the bigger your deposit (and the bigger your equity) the better your chances of a successful loan.

Aim for a 10 per cent deposit at the very least. But remember, if you can get 20 per cent or more, you'll avoid the added expense of mortgage insurance and stricter underwriting guidelines.

5. Build your relationship as a customer

Lenders like to know who you are before they commit, yet the first time they meet you is often when you ask for a loan.

If you have an existing relationship with a lender through other products such as savings accounts or credit cards, they can be more comfortable about you because they know how you conduct your accounts.

If you know which lender you'd prefer to deal with, consider becoming their customer for six months or so before applying for a loan.

6. Show a stable work history

Lenders prefer customers who've been gainfully employed on a continuous basis. Changing jobs is fine - especially in the same profession. But if there are gaps in your employment history lenders may want to know why.

If you're self-employed, understand you may not be as attractive to a lender as someone who earns a PAYG salary. You'll have to work harder to demonstrate your ability to repay the loan. At least two years' of tax returns will be a must.

7. Demonstrate a savings history

Lenders are interested in your ability to commit. One way to show you can is to point to a track record of savings that demonstrate good financial management and control. If you can, aim to show at least a six-month savings history, and explain to your lender how you achieved your savings goal.

8. Pay your bills

Lenders want to know that you're capable of managing your day to day finances. Show them that you meet your financial commitments - including your regular utility and other bills - on time and in full.

9. Manage your credit card

Demonstrating that you can manage your credit card will help to convince a lender that you know how to manage debt. You'll be more attractive to a lender if you pay your credit card off in full each month - proving that you're not funding your lifestyle on short term credit. At the very least, lenders will want to see that you're making more than the minimum repayments on any credit card debt.

10. Detail your past relationships

History often repeats and as part of establishing your new relationship, your lender will want to know how your previous relationships have worked out.

They'll ask you about previous loans, but they'll also ask your previous lending partners first hand, requesting credit checks through organisations such as Veda Advantage and Dun & Bradstreet.

In today's market, it's important to have a clean credit history - even small blemishes such as missed electricity bills can affect your application. Make sure that your bills are paid on time and that any disputes are sorted out quickly.

Summing up

Building a long-term relationship requires preparation, planning and a good first impression.

When it comes to understanding what your lender is looking for, the above list is a good start. See how you measure up and if there are gaps in how you can present yourself - or if there are areas that need improvement - start working on them now.

Remember that the stronger your application, the more opportunity you'll have to negotiate for lower rates and better features on your loan.

We'd like to hear of your experiences with lenders. What worked for or against you? What else can be done to improve your prospects of a getting a loan?
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