Hoping to get preapproved for a mortgage this year? Then be aware of what banks class as potential red flags when it comes to house loan applications.
On paper, you might be under the impression that you’re a great candidate for a home loan with a stable job and a solid savings history. However, unfortunately the devil is in the details when it comes to house loan applications and approvals, and if you want to get the green light then it might time to curb that UberEats addiction.
Six Red Flags Associated With House Loan Applications If you’re in the process of getting your ducks in a row to apply for a home loan, then there are a number of small yet notable factors that can greatly affect your chances of getting approved.
Changing Jobs – Above all, banks like stability. Even if you’re likely to earn more money through a new avenue of employment, lending providers like to see applicants holding down the same job for at least six months. Basically the more stable your employment is, the better.
Your Industry – Contractors or those who are self employed often have a harder time getting preapproved for a loan, did you know that the type of industry you work in can also play a role in approval? In particular, miners and farmers can be viewed unfavourably and as more of a “risk”.
Credit Card Limits – Even if you don’t owe anything on your credit card or are on top of your repayments, banks view your spending limit on what you could have the potential to owe as an extra debt – so it might be time to lower than limit from $5000 to $2000 if you can.
Late Payments – Have you missed a scheduled Afterpay installment, or perhaps been a few days late in paying your phone bill? If you don’t keep an eye on your financial commitments these could be viewed as defaults, which is a big no-no for lending providers.
No Buffer Fund – Do you have an emergency fund set aside for a rainy day? In the event that you lost your job, how would you potentially pay back your mortgage? Even if you have a home loan deposit saved, buyers should have a separate amount stashed away for incidentals.
Your Spending Habits – All lending providers will dissect your entire financial history with a fine toothed comb, so be honest and realistic about your spending habits. If your spending habits like take out or Netflix don’t have a good explanation, they’re classed as regular expenses.
Where To Find Help With House Loan Applications
Getting preapproved for a home loan has long been regarded as stressful, frustrating and time consuming – but the good news is that it doesn’t have to be.
Since their inception in 2012, the team at Madd Loans have worked tirelessly in providing over 1700 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, owner George Samios takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it.
An independent operator can be your greatest asset when it comes to navigating loan options, as brokers are there to make you happy – not the banks. To speak to a Brisbane based mortgage professional, please get in touch with the team at Madd Loans today to help turn