Banks use three main criteria to approve loans: serviceability, loan-to-value ratio, and income-to-loan ratio. Lending has tightened dramatically since 10-15 years ago. To qualify now, focus on earning more and building capital.
When we're talking about lending criteria, what we're really talking about is how people actually get loans when it comes to buying their own home or buying a property investment. And so lending criteria can mean the amount of serviceability you can access, it can mean your loan-to-value ratio, income-to-loan ratio, whole raft of other reasons about how the banks actually assess your serviceability. Now suffice to say, this is getting harder. It's not the same as what it was 10 to 15 years ago where it was a wild west of lending. So what I want you to start thinking about as we're going through this kind of shift in this process is how can you actually take control of your own resources, being your earning potential and building up your level of capital? It all comes down to your investment strategy.
