3 Things That Could Hurt Your Home Loan Application

Many things could go wrong with your home loan application if you go to your lender unprepared. Thus, it helps to be aware of some of the essentials before setting an appointment with your lender. We are going to share some of them with you in this article, so if you're ready, then read on. Let's start with...

  1. Your credit card debts. If you have a sizeable credit card debt, then it could hurt the chances of your application being approved. The reason for this is that the amount of money you can borrow from your lender partly depends on the amount of money you owe.

    What you can do: Before applying for a home loan, it would be a good idea to start paying off your debts and canceling your other cards, if you have two or more of them. These little steps could help improve your financial standing, making lenders more willing to let you borrow money from them.
  2. Your credit rating. Your credit rating is the lender's way of gauging your ability and reliability when it comes to settling your debts. The more positive your credit rating, the greater your chances of having your application approved.

    What you can do: If you have a bill that needs to get paid, make sure you pay it before the due date. Otherwise, your late payment could create a negative impact on your credit rating, which could consequently affect your loan application.
  3. Organize your documents. Your lender would require different documents to establish your identity and your ability to settle your financial obligations. Lenders are often very strict about these requirements, thus it pays to come in prepared before you go to the bank.

    What you can do: When you meet a lender for the first time, be sure to ask for the list of documents they require from you. Once you have that, create a checklist of these requirements and tick off each item once you're done preparing them. Aside from that, collect these documents in a single folder so you can always have them handy when you need them.

By following the tips we have shared with you, you'll be able to increase your chances of having your application approved. Keep in mind, however, that each lender might have different sets of requirements, so inquire about these before taking the first step. For more information, please contact our professional advisors at Rate Detective. They will help you with all your home loan-related needs, including reducing your loan payments and shortening your payment terms.

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Published on October 10-th, 2012 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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