Dealing with Rejection When Your Loan is Declined

If you're working on a limited budget when applying for a loan, there is always a chance of your application being denied. Of course it can be frustrating and you may be tempted not to try again. However, it is not the end of the road for you, as we'll show in the following paragraphs. So get the proverbial dust off your clothes and read on.

  1. Try again. This is important if you really want to get that dream home of yours. Remember the law of averages when you're applying for a loan. What it means is that the more lenders you approach for a loan, the greater your chance of finding one that has the right deal for you. So keep on looking until you find that ideal lender.
  2. Check your figures. Let's say that you have applied with a number of lenders but you have yet to receive any positive news from any of them. In that case, it would be a good idea to take a good hard look into your finances. Find out if you can really afford the mortgage on your salary. Plus, take into account your credit card debts as this may also affect your application. In other words, keep your numbers healthy and be realistic about your goals when applying for a loan.
  3. Review your strategy. Many people would just walk away the minute they find out that they have been declined by the lender. A better strategy would be to ask your lender why they rejected your application. They can provide you with an insight on what you need to fix or work on in order to get a loan. You may not know it, but it might require just a minor adjustment on your finances or fixing a small problem on your paperwork to get back on track.
  4. Work with a broker. Probably the best way to speed up the entire application process would be to work with a broker. He knows all the requirements needed to apply, the lenders that might be a good fit for you, and other essential things that would help facilitate the process and increase your chances of getting approved.

The next time your application is declined, remember that there might still be a remedy for your situation. Thus, keep on trying, review your numbers and your strategy, and consider working with a broker who might be able to expedite the process for you.

If you already have a mortgage, contact our advisors at Rate Detective. They could help you get an even better deal on your rate, by reducing your monthly payments, or shorten the term of your loan. Contact us today for more details.

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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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