There’s nothing more heart-breaking than finding your dream home in a Mobus Property development and then having your application for a home loan declined by the bank.
In this two-part post, we look at 10 of the most common reasons your home loan is declined and how to overcome them.
You work for yourself
If you’ve been self-employed for a period of fewer than two years and have fewer than two years of tax returns, you’re going to have a hard time getting a home loan as you’re viewed as unstable in the bank’s eyes. However, you can get around this if you have a good accountant. They may be able to write you a letter after your first year’s tax returns to support your case with the banks.
You can’t properly document your income
If you’ve started a new job, have a record of frequent job-hopping and gaps in your employment, you are perceived to be a higher risk. You can overcome this by finding a good bank and getting a letter from your employer guaranteeing your employment for the next 12 months.
You’ve filed for bankruptcy or foreclosure
If you’ve filed for bankruptcy or are under debt administration, your chances of accessing a home loan are very low. These things stay on your record for a number of years (usually five) and the best thing you can do is wait it out. Managing your finances well while you’re waiting could improve your chances of having your home loan approved before the listing is wiped from your credit record.
You’re trying to buy a property you can’t afford
Sometimes it’s as simple as that. You may like a particular property and believe that you can afford it by shifting a few things around, but in reality it’s way above what you can actually manage. You need to view your purchase in the context of a long-term plan. You don’t want to get into something now that will turn into a financial nightmare further down the line.
Don’t let your dreams of owning a home in one of Mobus Property’s world-class developments go down the drain with your declined home loan application. Check out Part 2 of our post to find out where you’re going wrong.
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