Applying for your first home loan can seem a bit daunting. 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 your Mum said, ‘Liars always get caught out’? Well, she wasn’t lying, especially 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 entirely for a loan.
Tell the truth, the whole truth and nothing but the truth.
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. Besides, inflating your income or earnings would only hurt you in the long run, when you sign for a mortgage you can’t truthfully afford.
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 your lender will pick it up.
Whether it’s through the bank statements you’re asked to provide, or via their own independent background checks – anything hidden will come out eventually.
Provide everything, warts and all.
Provide all the facts as they stand. It’s better to discuss your circumstances with a lender than have to back-pedal like crazy when you get a phone call asking you to explain a discrepancy they’ve found.
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?
Wrong. 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 apply 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.
Find one lender and stick with them.
There aren’t many times we’d suggest putting all your eggs in one basket, but when it comes to loan applications – it’s kind of important. Securing a home loan isn’t a numbers game. Do your research, find the loan and lender you want, then focus on one application.
Talk to ME.
One of the easiest ways to avoid blunders with your home loan application is by talking to a ME Mobile Banker. They can help you navigate the process.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.