Ask any lender or experienced mortgage broker why applications are often denied, and you will see a pattern emerge soon enough. There are common reasons why this happens, thus if you are planning on applying for a home loan, it helps to know what these pitfalls are. Avoiding them could significantly help increase the chances of your application being approved. We'll provide you with the details in the list below.
- Lack of documentation. Lenders request documents from borrowers for a simple reason: to establish that the borrower's ability to pay the mortgage. Failure to submit any of the required documents could quickly lead to the application being turned down. Therefore, determine exactly what these documents are and ensure you have them before paying your lender a visit.
- Your credit history. Defaulting on your payments could haunt you once you make a mortgage application. You could avoid this, however, by paying your bills on time. What if you already missed a few payments on your credit card bill, for example? Ask for your broker's help. He might be able to help you turn your situation around. In addition, make sure your credit history's clean by requesting for a free credit report online.
- Your job stability. Lenders love borrowers who have stable finances. Thus, it would help if you have held a position for at least six months. It will signal to lenders that you have a steady income, and therefore would be able to make payments on time.
- Your actual expenses. Do you have an emergency credit card? Do you spend money on your children's school fees? Be open about these expenses both to your broker and the lender, rather than keep the information to yourself. Lenders will know about these eventually, which could hurt your chances of getting the loan due to non-disclosure.
When applying for a home loan, it pays to always come in prepared with all the necessary information your lender might need. This will make their job easier and the same time, increase your chances of getting an approval. In addition, keep your finances stable, as healthy finances open you to more attractive rates.
Meanwhile, when it comes to getting the best deals for your home loan, it pays to seek the help of Rate Detective's professional advisors. They will assess your needs and provide you with rate comparisons from Australia's top lenders, so that you can find a deal that perfectly fits your requirements.