Do you fall into any of these 4 groups?
Lenders are always changing their lending policies in an effort to try and confuse you and even prevent you from getting a home loan. Despite this, there are just some people who will always get declined no matter what they do. Fortunately, there’s always a way out with a little bit of creative thinking and some help from an expert.
You have no deposit
The most common reason for a decline is because you don’t have a deposit. A deposit shows the lender that you have good financial habits and can manage your money well enough that you can make your mortgage repayments.
Now, what if you have a great job but you had some setbacks recently and haven’t been able to save a deposit? Should you wait for four or five months to build up a sizeable enough deposit so that you can apply for a home loan? Keep in mind that property prices will continue to rise while you try to scramble to save.
Rather than trying to jump on a speeding train, you may instead be better off applying for a guarantor home loan. This is where your folks use their property as security against your home loan so you can buy a house without a deposit. Most banks are happy to do this as long as your parents have enough equity. Later on, once you’ve paid off about 80% of your loan, you can remove the guarantee like a responsible child!
If a guarantor home loan is out of the question for you, there are other no deposit home loan solutions available depending on your situation.
Is there any way you can get approved if you’re bankrupt? Unfortunately, the answer is no, but you can apply once you’ve been discharged from your bankruptcy.
If you have had other credit issues such as defaults, court writs or judgments, our brokers can also help you by applying with a lender who is more lenient towards borrowers with a bad credit history.
Lenders aren’t lenient at all towards people who don’t earn an income at all! Sounds pretty obvious but under the NCCP Act which regulates lending in Australia, it is absolutely illegal to approve a loan for someone who cannot afford it.
Admittedly, it is harder to get approved this way but at least you can:
- Raise your credit score
- Increase your chances of approval
- Get some money in your pocket!
You’re a minor
The last group of people who always get declined are the kiddies. If you’re under 18 then it is not legally possible to enter into a loan contract. Get your parents to buy you a house if you’re so desperate to have your own place. If you’re planning on applying just after you turn 18 then keep in mind that having no prior credit history can impact your credit score and your chances of getting approved for a mortgage.
If you’ve been knocked back for a home loan, firstly, stop applying! You’re negatively affecting your credit history with unnecessary applications. Secondly, call us today on 1300 889 743 or fill in our free assessment form. Our mortgage brokers are experts in getting home loan applications approved for people who don’t quite tick all of the boxes.