Professionals Nowra What can you do if your home loan is rejected? It’s a terrible feeling, but here are six steps from leading mortgage brokerage institution Savvy to get you back on track to mortgage approval.
- Don’t panic
The first thing you should do is keep calm and collect yourself. Getting a home loan can be difficult but it isn’t impossible.
- Ask what went wrong
If you get rejected for a home loan ask why. Lenders will give you all the reasons why. Try to fix what you can and then you can get started on your next application.
- Check your credit history
One of the major contributors to home loan rejection is a poor credit history. A credit history contains information on every loan, credit card, or even post-paid phone contract you’ve ever applied for. It also tells banks and lenders if you’ve ever defaulted on a loan, or failed to pay a bill after 60 days.
A credit history can contain mistakes, so it’s up to you to catch these mistakes and fix them. Clearing a bad credit history takes time but it will be well worth it in the end.
- Keep looking for houses within or below your budget
Many banks and lenders reject applications based on what you can afford to pay back. If you are buying a house beyond your means, this is a sure way to tip your application into the rejected pile. Keep looking for houses within or below your budget and try again. Of course, if you look for houses that are not valuable, your loan could get rejected too; banks and lenders only look to provide loans for high value properties.
- Find guarantors or people who can vouch for you
Other common reason lenders reject home loan applications is a poor or incomplete residential or work history. Some of us are self-employed or small business owners, which can hamper your ability to get a home loan. If you can’t catch a break, get a guarantor or letters of support from clients, bosses or former landlords. This goes a long way in gaining approval.
- Save a larger deposit
Another sure fire way to get approval is to save a larger deposit for the home you want to buy. A larger deposit means more security for the bank, and a higher equity in the house you intend to purchase. It can take a while, but it does give you a bigger chance of gaining home loan approval.
Perhaps you need to sell before you move on to your next property, if so call Professionals Clyde Poulton Real Estate on 4421 2644 for a free, no obligation market appraisal.