Imagine getting pre-approval from your lender either over the phone, online or even at your local branch, only to find out that once you have made your purchase, your loan was not approved.
Since the advent of the COVID-19 outbreak, Mortgage Broker What If We Finance has found this is happening more and more.
Almost weekly, Mortgage Broker Melbourne What If We Finance feels the pain of stunned borrowers who have received preapproval online or over the phone who do not understand why their loan was not accepted once it went through the bank’s full credit process.
While the reasons are many and varied, the key causes What If We Finance have found are:
The borrower miscalculates their actual income
Some lenders will not take into account over-time, commission, allowances or casual jobs unless they have received this income for over a two-year period or a period meeting bank credit requirements. This means your borrowing capacity is reduced.
Online bank systems may not pick up credit defaults or excessive credit queries held against your name. Having credit defaults or excessive credit queries can significantly reduce your chances of your loan being accepted.
The purchased property falls outside the lenders’ perputually changing policy
The suburb you purchased your property in has lending restrictions. For example, inner city or Docklands apartments have restrictions:
- Self employed applicants may not be accepted because they have not had their ABN registered for a minimum of two years and or registered for GST.
- Self employed applicants are generally assessed on the average of two years income and not the current year. Therefore, inaccurate reporting of income may lead to lower borrowing capacity.
In other instances, the valuation of the property is not as per the purchase price.
Ensure Pre-approval Success with What If We Finance
What If We Finance advises that you engage an independent Mortgage Broker to obtain your pre-approval. A Mortgage Broker will recommend the appropriate lender and ensure your preapproval goes through the entire lending process. Once assessed, you will get a genuine pre-approval that lasts for 3 to 6 months.
A pre-approval must be fully assessed and not based on a phone conversation or online calculator. Full assessment means all your financial circumstances are considered, reviewed and an objective credit decision is made.
Forget about the instant online, or over the phone pre-approval. They are not worth the paper they are written on.
Contact your mortgage broker What If We Finance to avoid disappointment today.