Welcome to Part 2 of our post, where we take a look at some of the other reasons your home loan is not getting approved.
You didn’t shop around for a loan
You need to consider all of your options and shop around with as many lenders as possible. By doing this, you have more of a chance of getting approved, because someone will be able to offer you a good deal that fits into your budget.
An inexperienced loan officer
If you have an inexperienced loan officer, they may not know how to structure and package a deal for your mortgage in such a way that suits you. An experienced professional should be able to assist you with advice on how to improve your debt-to-income ratio quickly and what kind of loan makes best sense for your situation.
You don’t have a big enough deposit
Having a bigger deposit always gives you better access to more lenders with a variety of terms and interest rates you can negotiate. Having a 20% deposit dramatically increases your chances of guaranteeing a loan.
You have a history of late payments
Here comes your credit history, sneaking up on you again. Even if you have a history of always paying your debts in full, having a record for being a slow or late payer will make banks think twice about doing business with you.
You’ve picked the wrong type of property
Sometimes banks and property lenders are hesitant about financing certain types of properties like investment properties and second homes. This doesn’t mean that funding is not available for these types of properties, but rather that the process is a lot tougher as they come with stricter terms like bigger deposits.
The economy is experiencing a downturn
An unstable economy is the most common excuse banks give for not approving a loan and this can actually be true at times, making it harder to access credit. You’ll know the economy is tight because property market values are flat or falling. In this case, perhaps your best bet would be to wait a few months and try again once the economy starts to look up again.
If your home loan has been approved and you’re ready to take the next step, contact Mobus Property today to find out more about some of our ground-breaking developments.
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