Time to clean up?

What has cleaning got to do with your home loan, you might wonder.

It is pretty much guaranteed that your mortgage adviser will request three to six months of your personal cheque account statements when applying for a home loan.

This isn't really because they want to see how often you stop for coffee, but rather to see that you can manage your bank accounts, and not go into overdraft or beyond your overdraft limits. Increasingly, they will be looking closely at your behaviours, and poor account conduct could be a reason for them to get the wobbles about your application.

So here are some really easy tips:

• If you have an overdraft, make sure you stick within that limit! Even a couple of bucks over the limit here and there can detract from your otherwise good-looking application. Even better, I challenge you to get rid of your overdraft.

• Do you pay bills via automatic payment or direct debit? Make sure these are lined up with your pay day so that you don’t have any dishonoured payments. These 'bounced' payments don't look good for any prospective lender and they can often be costing you $5 - $15 each time a payment fails.

• Withdraw your allocated amount of ‘fun money’ in cash each pay day to avoid overspending and your account becoming overdrawn.

• Set up text alerts reminding you of an upcoming payment or if your balance dips below a certain level. This gives you a better handle on your account balance and lets you deal with it before the account goes into overdraft.

Showing good behaviours with your money makes it more appealing for a lender to sign off a loan approval for hundreds of thousands of dollars to you.

It’s never too late to start cleaning up... (oh heck, do I sound like your Mum?!)