Paul from Banora Point has asked a question…
[blockquote]”I’m applying for a home loan and the bank have asked for my current rental agent as proof of my rent payments. I have never heard of this happening before, I’m worried because I’ve fallen behind a few times over the 2 years I’ve been in my unit and I’m worried this may effect my application?”[/blockquote]
Paul, good luck with your search for a new home and your home loan, unfortunately rental agents are reporting that they are receiving many more requests from Financial institutions than ever before, the GFC has made them just slightly more wary that they have been in the past and they are using every avenue available to ensure the loan is a good risk, so asking the rental agent for proof that the rent has been paid on time is good corporate governance as far as they are concerned.
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The legislation for rental payments states you need to pay your rent on or before the day the rent is due, banks will look at your tenant ledger and audit the risk of the loan according to the frequency of your rent payments, if you are chronically late with rent payments they may see that as an unacceptable risk , they will add all the factors of your financial history and gauge the risk involved. One or two payments being late in a 26 week period may not ring too many alarm bells but your rent being 4 to 7 days late on a regular basis will definitely set the bells ringing.
Your rental payment is probably the biggest singular payment you make on a weekly basis and needs to be budgeted for, having the bank direct debit the rent to the agent is a good way to ensure your record is in good order as well, keep good records and call your agent if you are in any way unsure of your situation.
We all have unexpected events happen, cars break down, accidents at work, loved ones pass away, these are unexpected events and can cause you financial pressure, having a safety net to ensure you have adequate funds to cover your rent during these times is very important as the bank will look at this and understand you are taking on the mortgage responsibly, car insurance, holidays, weddings and babies are not unexpected events in the eyes of most agents or banks, they are payments and expenses that reoccur or were planned for and need to be factored into the equation of financial planning.
If you do find your self in the unexpected position of not being able to keep up the rent payment, make an appointment your rental agent to discuss the matter, they will formulate a payment plan to get you back on track and this will be recorded in your file notes which will show the bank you have a financially responsible nature.
Good luck with your new home.