Ever wondered why people get declined for a home loan? Here are 11 reasons why the banks are nuts!
Watch this video to avoid being in a similar situation.
Don’t have a deposit? Find out how you can buy a house without it https://www.homeloanexperts.com.au/no-deposit-home-loans/
This video was produced by Home Loan Experts. Visit us at http://www.homeloanexperts.com.au for more information.
11 Reasons you could get declined for a home loan.
1. You have a small deposit.
You’ll usually need between 5-10% deposit…unless you have a guarantor.
2. You have bad credit.
However, some lenders will consider your application if you’re discharged from bankruptcy or have paid your defaults.
Lenders cannot approve your application unless you can prove the source of your income.
4. You’re too young.
If you’re aged between 18-23, your credit score may be impacted.
Luckily, there are lenders that do not credit score.
5. You’re close to retirement age.
Banks can’t discriminate against your age but they may require you to demonstrate your exit strategy.
6. You’ve been in your job for less than 12 months.
Most banks will decline your loan but there are lenders that take a common sense approach.
7. You’ve been self-employed for less than 2 years.
However, for certain professionals, 1 year is enough.
8.You want to buy a unique property.
Properties such as inner city units and those in rural locations can be cool however, banks only care about how hard the property would be to sell in case you default on your loan.
9. You have bad spending habits.
Your bank will look at your transaction history and will consider whether you can afford to make the mortgage repayments.
10.You’ve applied with a lot of lenders.
Having too many enquiries on your credit file can make it tough to get a home loan but some lenders don’t mind.
11.You want to borrow 95% of the property value.
These loans are seen as a higher risk so you’ll need someone who knows how to present your case to the lender.
You can borrow 100% with a guarantor.