Published at: 6/21/2016 3:29:00 PM
Don’t jeopardise your loan approval. Avoid these three critical steps when you’re in the market for a first home.
Applying for your first home loan is pretty straightforward, and while it’s hard to make a serious gaffe with your loan application, lenders are sympathetic if you make a genuine mistake.
However there are some mistakes that could knock your application right out of the water. Be sure to avoid these three blunders to give yourself the best shot of securing loan approval.
1. Telling a few porkies
Remember when mum said “Liars always get caught out”? She was spot on when it comes to loan applications.
Lenders ask for hard evidence of key factors like your income and how you sourced funds for your deposit. So it pays to tell the truth. If you pull a few swifties on your application you’re sure to be pulled up by your lender and that could see you knocked back for a loan.
TIP: Provide accurate, truthful information. Even if you don’t get approval this time around, a lender can explain how you can improve your odds of securing loan approval further down the track.
2. Overlooking a few key facts
Does it matter if you don’t mention the five maxed out credit cards on your loan application? Definitely.
Leaving out vital bits of information is what lenders call ‘non-disclosure’. And it can be just as damaging as fudging the figures.
No matter whether you gloss over issues like out of control credit card debt or understate personal expenses by failing to mention something like child support obligations, there’s a good chance lenders will pick it up through the bank statements you’re asked to provide with a loan application or via their own independent background checks.
TIP: Provide all the facts as they stand. It’s better to discuss your circumstances with a lender than back pedal like crazy when you get a ‘please explain’.
3. Applying for multiple loans
It can seem like a good idea to apply for as many loans as possible. After all, if you apply for enough loans, surely at least one lender will come to the party right?
Actually, no. Making multiple applications can seriously damage your chances of securing a first home loan.
That’s because whenever you apply for a loan, the lender will check your personal credit history. It’s like a dossier of credit-related information about you compiled by credit reference companies. And every time you submit an application for credit – be it a mobile phone plan, a credit card or a home loan, it shows up on your credit record.
When a lender sees multiple home loan applications on your credit file it suggests you’ve been knocked back by other lenders and that makes you look like a high risk borrower.
TIP: Securing a home loan isn’t a numbers game. Do your research. Find the loan and lender you want, then focus on one application.
The easiest way to avoid blunders with your home loan application is by talking to your ME mobile banking manager. We’ll guide you through the process to keep things sweet.
Terms, conditions, fees and charges apply. Applications are subject to credit approval.