Combining Credit Issues
We regularly have clients call us to help with with a very difficult loan that they can’t get financed through the banks.
In many cases there simply is no bank that offers exactly what the client wants.
The reason for this is that the client has a combination of too many credit issues.
What is a credit issue?
A “credit issue” is not necessarily a problem with your credit file.
It is something that the credit department of a bank is likely to consider a problem or it is something that is not standard.
For example the credit department of the banks will consider the following to be credit issues:
- Being on a probationary period for your job.
- Having a default on your credit file.
- Earning part of your wage as a bonus.
- Buying a property in a remote location.
- Borrowing close to your affordability limit.
- Living in Australia on a temporary visa.
- Having a low credit score.
The list of potential credit issues is practically endless! There are many aspects of your application which you may consider to be normal that are actually a concern to the bank.
What is a non-standard loan?
A “non-standard” loan is any loan type that is uncommon, complex and does not get processed by the bank using their normal procedure.
The banks would consider these transactions to be non-standard:
- Buying a property in a trust or SMSF.
- Applying for a construction loan.
- Requesting a 10 year interest only period.
- Buying a property together with three of your friends.
- Buying a property with the support of a guarantor.
Do you need help with a tricky application? Call us on 1300 889 743 or enquire online and one of our mortgage brokers can help to get your loan approved.
Why is having multiple issues a problem?
The problem with having multiple credit issues or a non-standard loan with credit issues is that there is often no lender that can accept your situation.
If there is just one or two issues then normally at least one or two of our lenders can potentially help you. However when the issues are combined there are often no options.
For example, if you are buying a property in a mining town then we would have many lenders to choose from. However if you were also buying the property in a hybrid trust and you were working in a casual job then we would not be able to help you.
This is because we have lenders that can help people working in a casual job and we have lenders that accept properties in mining towns as security, however none of our lenders will do both!
Keep it simple to get approved
The old saying “keep it simple” is especially true when it comes to applying for a home loan. Modern day banks should really be thought of as a factory that handles paperwork. If anything is “outside of the box” then they find it very difficult to help.
The goal of the banks isn’t to be all things to all people. The goal of the banks is to be as efficient as possible to service the mass market. If you have a complex situation then they cannot assist you and remain profitable with their low margins.
If you want your loan approved then you should try to eliminate as many credit issues as possible before applying for a loan.
How can we help?
As specialist mortgage brokers we have an in depth understanding of each bank’s lending criteria, risk appetite and systems. So we know which credit issues are not a problem for each bank.
If you discuss your situation with us up front then we can confirm if we can help you to get approved without changing your situation or we can let you know which specific parts of your situation need to be changed.
If you aren’t yet ready to buy a property then we can complete an assessment of your situation using our prepare to buy program.
Please call us on 1300 889 743 or enquire online and one of our mortgage brokers can give you feedback on your situation.