7 Things That Might Trip You Up When Applying for a Home Loan
Buying a home for the first time is super exciting, so the last thing you want (or need) is the application for your home loan being held up.
Many factors are considered by your mortgage broker and lender when applying for a home loan. In this way, showing stability and consistency is key to proving your ability to repay a loan.
However, there are some things that may have happened recently or are currently happening in your life that could potentially trip you up.
• You have recently had an extended break and are hoping to return to work.
In this case, it might be wise to wait until you are back at work and have a solid few months under your belt before applying for a loan. This will give you time to show stability and consistency on your employment record.
• You have had multiple jobs over the last few months
While consistent employment doesn’t necessarily mean you need to have the same job for years, it might be a good idea to hold off changing jobs when applying for a home loan. To apply for a loan, you need at least two payslips from the same employer. Even better, if you were to show a consistent 12 months with one employer, you’ll have a better chance of having your application accepted.
• You’re on a probationary period
When applying for a loan, it is quite difficult to have your application accepted until after your role is made permanent.
• You’re self-employed
Demonstrating a stable stream of income can be difficult when self-employed. Therefore, it is a good idea to hire an accountant to get your affairs in order. They can help you put together financial statements, which will be needed as part of your loan application. To apply, you need at least two year’s history to support your claim.
• You’ve applied for a loan, but the property you’ve found requires a greater amount
If you’ve previously applied for a loan, but have found a property that requires a larger amount, you’ll be subject to a whole new set of lending criteria, which could lead your loan to be declined. This could happen when you’ve bought your home at auction or unconditionally.
• You’ve neglected to check your credit information
If you’ve neglected to check your credit score before starting the application process, your mortgage broker or lender will find out quickly if your debts disqualify you from taking out a loan. Lenders will go through your credit history with a fine-toothed comb to determine your trustworthiness. Before you apply for a loan, it’s a good idea to pay off any outstanding credit card debt and refrain from getting a new card.
• You’ve neglected to consult a mortgage broker
A mortgage broker can help determine the loan that is right for you by reviewing a panel of lenders and the packages they offer. They will take into consideration your current finances to find the best deal on the market. By consulting a professional, you won’t need to stress about applying for a loan that’s too far out of reach.
At Select, we offer no-obligation, quality and free advice to help you reach your financial goals. Give us a call on (08) 9417 3399 to talk with one of our brokers.