Finding out that your home loan has been declined is never a good feeling, but don’t despair – all lenders are not equal, and just because one bank has said “no deal” it doesn’t mean you should give up just yet.
Since the GFC, there have been a much greater percentage of loan applications that have been declined. The mortgage insurance in particular have been almost ruthless in their scrutiny of applications. Knowing what lenders and the insurers are looking for before you apply is now vital to avoid having your loan declined. It has never been more important to use the services of an expert Broker
 
If you are on the receiving end of a loan decline, ask the lender why your loan was declined so we can analyze your unique circumstance.
 
We have lenders on our panel that have sign off on Mortgage Insurance and assess the loan on it’s merits
 
Lenders and Mortgage Insurers consider many factors in assessing your mortgage application

Usually these loans are declined due to bad credit score or Bank Policy and may not always be the fault of the applicant. We have Funders that will look at each application and base the loan on merit and other factors up to 95% LVR.

What do lenders and Mortgage Insurers look for in Home Loans?

  • Stable employment: In most cases you must have been in your current job for 12 months.
  • A good income: Lenders look to strong employment in a stable industry
  • Reasonable asset position: Your asset position relative to your age & income is important to lenders and as such the combination of your current debts e.g credit cards, personal loans, car loans should not be more than your genuine savings to put you in a negative position
  • Rental History: Funders will require copies of rental history to see that commitments can be made on time
  • Security: Funders and Mortgage insurers will want property to be located in Capital City or Major Regional area in good condition.
  • Clear credit history: Must have a clean credit file with very few enquiries and with no arrears on your bills such as rent, credit cards, personal loans and other debts
  • Too many credit inquiries: When it comes to credit enquiries, the prime lenders prefer if you have made only 1 or 2 enquiries in the last 6 months, any more than this then it is likely for the banks to decline your home loan
  • Failed Banks Credit Scoring: Most of the major banks use an automated process called credit scoring without an Assessor looking at your file.

We have lenders that have sign off with Mortgage Insurers and will look at a deal based on its merits. Each loan has to be treated as an individual basis so it is important to deal with a broker that has several options and is experienced in this category of lending.

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