5 Top Tips For Sorting Out A Home Loan Application

5 Top Tips For Sorting Out A Home Loan Application With Credit Issues

There are a variety of factors that affect your credit history – divorce, illness, timing slips, redundancy, late payments, missed payments, and even bills that weren’t redirected after a move. If you have experienced any of these credit issues, then all is not lost for your loan application hopes. There are plenty of options you have to help get your credit back on track to successfully apply for a loan.

1. Deal With Your Credit Report

So, who should be considering buying a property in the current market? Quite simply, people should only be considering property purchases who have the safety net of a secure job, along with either enough money saved or other liquid assets.

Some will see this lower market as an opportunity to purchase property at a price that is materially much lower than it was earlier this year. Then there are those brave cashed-up people who believe that times like these are when fortunes can be made, and they hope to secure a property at once-in-a-generation bargain prices. And who knows, they could very well be right on the money.

It is actually quite likely that some excellent opportunities to buy will become available over the coming months, especially during the second half of this year. That means there are some savvy investors who are ready to buy, in preparation for a predicted rebound next year.

2. Shop Around

If you received a no from the first potential lender you approached, then try and try again. There are plenty of lenders available and just because one said no does not mean they will all say no. Lenders have different boxes to tick, so another lender may view your situation more favourably than the first.

Of course, it’s always smart to shop around no matter what you’re doing or looking for. Do remember, however, that if you submit multiple credit applications in a short period of time it can negatively influence your credit score. Proceed with caution, and if you want to avoid traps you should consider working with professionals like Seek Mortgages.

3. Explore Alternative Lending

If your credit issues are the only thing holding you back, you may find joy with a non-bank lender that offers more flexible products. The banks stick to fixed rules when it comes to loan assessments. The world has evolved since then and lenders like Seek Mortgages provide a different path to loans using a wider set of parameters.

4. Affordable Payments

It doesn’t matter who you secure your loan with, the lender is responsible for ensuring you can afford to make the agreed repayments. It isn’t worth getting into hardship so ensure you are able to meet the repayment demands.

5. Options

If your deposit is less than 20%, you will likely have to pay an LMI (Lenders Mortgage Insurance) fee. It provides the lender with cover if you miss payments at any point. They’re a separate business with their own rules. Income source and credit history may leave you at risk of rejection, even if the lender has approved the loan. There is another way, of course. Third-party insurers and lenders like Seek Mortgages offer LPF (Lender Protection Fee to provide flexibility to assess the loan without requiring LMI provider approval.

If you would like to learn more, reach out to Seek Mortgages today and talk to us about finding a lender that will help turn your no into a yes.

Why A Home Loan NO Might Not Be The Final Answer

Why A Home Loan ‘No” Might Not Be The Final Answer

If you have ever been turned down for a loan, there’s a good chance you’ve asked why? Why did you get turned down?

Lending rules can change so if a bank has rejected your loan it might simply be a reflection of their credit policy. Of course, that credit policy may have shifted as it often does due to market conditions. So, in times of economic certainty you may have had an easy time securing a home loan versus now when the world isn’t as certain therefore it’s a greater challenge. This isn’t the only reason, there are plenty of reasons your home loan may have been rejected. It’s important, however, to remember that a no might not be the final answer.

1. Cross Your T's

Lenders want to see regular income. If you’re self-employed, that may present an issue. If you have irregular earnings, multiple jobs, or unusual income, then this sits outside of the traditional boxes that lenders look to tick.

2. Credit History

Another big issue for rejections is credit history. Your credit history is your biggest obstacle to overcome if your past is spotty. Conventional lenders use an automated process to score credit. Your application may be rejected simply because the computer says no.

3. Poor Paperwork

If you don’t have the right paperwork or present a poor standard of paperwork, this can influence whether your home loan is rejected. Your tax returns must be up-to-date, especially if you’re self-employed, If you are new to the country, then a lack of employment history may also go against you.

4. Bankruptcy

If you have previously filed for bankruptcy, then this is a red flag for traditional lenders. You might think you’re in the clear as you’ve been discharged, but it’s still something they consider.

There are plenty of reasons for your home loan to get knocked back, but what do you do about it?

The Alternative

There is good news! The world has evolved and now you have options beyond traditional lenders. Forget the banks who keep knocking you back, there are non-bank lending options that provide you with a personal approach to secure your home loan. These are big organisations like Seek Mortgages who exist solely to help people who have received a no.

Your application will be evaluated individually by an expert. The underwriter will look at a series of measures and consider the merit of you as a person, instead of allowing a computer to reject you. There is always an alternative available, especially if you have a poor credit history, unusual income, or any of the other issues we discussed above. The rejections you have experienced thus far may have knocked your confidence, but you don’t have to accept the first rejection and wait to apply again. Instead, you can opt for the non-traditional route before giving up altogether.

If you want a bit more information about what we can do to help, reach out and speak to Seek Mortgages today to find a lender who can help turn your home loan application from a no to a yes.

The Upsides of Home Loan Debt Consolidation

The Upsides of Home Loan Debt Consolidation

Unfortunately, a bunch of small debts can quickly balloon into one giant headache. There’s a simple way to get it under control, though. It’s possible to refinance your home to consolidate debt. But, is that the right move for you?

What Is It?

Simply, debt consolidation means combining the entirety of your debt into a single debt. That means all those credit cards, car loans, and otherwise are consolidated into a single monthly payment. When you deal with individual loans and debt, you are paying a different interest rate for each, as well as subject to a variety of balances and conditions. By rolling them into one you are managing your debt as easily and efficiently as possible. Before you decide whether this is the route for you, however, let us walk you through some of the upsides and downsides.

The Upside

Every month, you pay one single payment. Forget about setting up half a dozen direct debits or more, you don’t need to worry about any of that. It’s simpler to pare down all your debt into one single payment with one interest rate for a fixed period of time.

With a fixed rate and term, you know what your payment amount looks like. It might not sound like much, but the reality of the matter is you are far more likely to be disciplined in paying your debt off when you’re dealing with a fixed situation.

You will have less to pay monthly. Overall, though, you may end up paying back slightly more than original, but by stretching the terms you will reduce your monthly expenditure.

6 Home Deposit Saving Tips If You're Self-Employed

6 Home Deposit Saving Tips If You’re Self-Employed

Every self-employed individual knows how much income can vary from month to month. It’s difficult enough to plan for emergencies, the idea of saving for a house deposit with variable income is even more challenging. Not to worry, though, you can prove to potential lenders that you’re an excellent home loan candidate. It begins with proving that you have a history of regular and steady savings. Let’s take a look at six ways to boost your home deposit saving efforts.

1. Save More When You're Doing Well

When you’re swimming in work and things are going well, the temptation to treat yourself will be great. You have to resist this urge and instead focus on boosting your savings. If you are earning more money, then you should be putting more money away. Consider saving a percentage of your income each month so that no matter what you earn, you’re consistently saving.

2. Target-Setting

Where would you like to live? It’s a good idea to have an area and a neighbourhood in mind. This will allow you to calculate what type of deposit you’ll need, thus providing you with a savings goal. Just don’t forget to calculate legal fees and stamp duty. Depending on the loan you apply for, there will be different fees from different lenders. While it’s possible to secure a loan with a 5% deposit in your pocket, you can avoid extra fees if you push yourself to 20%.

3. Track Your Progress

Humans respond well to visual reminders so invest in an app or make a colourful chart, whatever it takes to give you a visual reminder of how you’re progressing with your savings target.

4. Tax-Smart

Self-employed individuals can claim tex deductions that add up when you dig into them. For example, if you work from home you may be able to claim for a portion of your internet, electricity, and other related costs. Speak to an accountant or qualified tax professional to learn more.

5. Tuck it Away

It’s tempting to skip a month of saving or only put something aside when you have a big payday. Don’t let this temptation get you. While your situation is unique, consistency is key. Save something from every payday so that you’re constantly taking little steps to your bigger goal.

6. Income Protection

Have you ever considered what you would do if you were unable to work due to illness or injury? Even a week or two of illness can upset the balance of your income so, it’s important that you protect your income. Income protection insurance is a wise investment. The last thing you want to do is dip into your deposit savings to pay the bills and live on if something goes wrong.

If you’re self-employed, interested in securing a mortgage, and you’d like to learn more, reach out to Seek Mortgages today. We can help connect you to a lender if the major banks have refused your loan application. Or, we can provide you with advice on how best to proceed.

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Should I Buy A House During Covid-19

The property market in Australia isn’t immune to the effects that coronavirus has had on our economy. Property prices have plummeted recently with sales volumes also down dramatically.

Prior to the restrictions put in place due to the coronavirus, this year’s property market kicked off on a high note. But now, all major property markets are forecast to be negatively impacted for the rest of the year; with the market rebound and eventual stabilisation not likely to occur until sometime in 2021.

The Market

This news hasn’t been great for anyone selling their property on the market, but it has unexpectedly put many first-home buyers into quite a strong position. Properties which would have most likely been over budget only months ago have now become increasingly accessible due to the current conditions of the market.

While purchasing property can almost always be put off until later for most people, there are thousands of prospective buyers out there who are still eager to buy. Especially those who have a deposit saved and a secure job, as they are the most likely to become the most powerful forces in the property market over the next few months.

Safety First

So, who should be considering buying a property in the current market? Quite simply, people should only be considering property purchases who have the safety net of a secure job, along with either enough money saved or other liquid assets.

Some will see this lower market as an opportunity to purchase property at a price that is materially much lower than it was earlier this year. Then there are those brave cashed-up people who believe that times like these are when fortunes can be made, and they hope to secure a property at once-in-a-generation bargain prices. And who knows, they could very well be right on the money.

It is actually quite likely that some excellent opportunities to buy will become available over the coming months, especially during the second half of this year. That means there are some savvy investors who are ready to buy, in preparation for a predicted rebound next year.

Lenders & Banks

First-time buyers especially must be confident that their job is secure before deciding to take out a mortgage.

For those who do end up losing their employment during this time, most of the major banks in Australia have dropped rates, and many are offering affected customers up to six months break from paying their mortgage. Other lenders are offering services that allow you to refinance or consolidate debts.

To get yourself into the best possible position to nab yourself some property at a bargain price, ensure that your finance is completely sorted. Not only will this give you the most realistic budget to work with which will provide you with some confidence when you’re considering all of your options, but many real estate agents won’t even take bookings for viewings without finance pre-approved.

Most reports that are forecasting property markets have included strong disclaimers that state their high uncertainty of what’s to come. This is not only due to the fact that everything is seemingly changing almost daily, but also because the longer that this crisis continues, the more material impact it will have on Australia’s property market.

Just remember that there are no guarantees when it comes to the property market. But at the end of the day, whether you’re buying or selling, we’re going to make it through this.

If you want to find out more about getting a mortgage in the current market, talk to our team today.

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COVID-19 and Business Loans: What You Need To Know

COVID-19, or coronavirus, is all anyone can talk about at the moment. It’s all we see on the news, and for most of us, it’s all we can think about – particularly when it comes to work. Whether you’re a business owner or a sole trader, regardless of the industry you’re in, COVID-19 has no doubt had a detrimental effect on your daily operations.

Thankfully, the Australian Government has offered a range of incentives and options for business owners, to help them get through the next few months. Details are changing all the time, and you can keep fully informed on the Australian Government’s Coronavirus app.

Currently, here are some of the loan assistance offers for businesses:

SME Guarantee Scheme

The SME Guarantee Scheme has been introduced to assist small and medium enterprises (SMEs). The scheme provides a guarantee of 50% to small and medium enterprise lenders for new, unsecured loans to be used for working capital. This allows SMEs access to additional funding that will help them survive the economic downturn. Businesses with less than $50 million turnover are eligible for the following:

  • Loans up to $250,000 per borrower
  • Loans up to three years, with no payments required in the first six months
  • Unsecured financial loans, so no assets are required to secure the loan

These loans are subject to the lender’s assessment and is available to businesses until September 30, 2020.

Cash Flow Boost

Small to medium businesses and charities (non-profit) who employ workers and have an annual turnover of less than $50 million may be eligible to receive cash payments, tax-free, of up to $100,000. These can be used to pay loans, rent, electricity and staff costs.

Reduced Payment Options

Many major and small lenders have offered their current business banking customers a range of support, including deferred business loan payments, reduced or deferred overdraft repayments, and some have also waived fees.

The Big Four

Each of the big four banks is offering their own financial support to their customers. The Commonwealth Bank has announced a 1.00% reduction for all existing small business loans, and they are waiving early redraw fees on business term deposit accounts. National Australia Bank has decreased variable business loans by 1.00% and 2.00% for QuickBiz loans and overdrafts. They are also offering deferred business loan and business credit card repayments. Westpac has reduced overdrafts by 2.00% and variable cash-based loans for small business by 1.00%. You can also defer business credit card repayments for three months. ANZ has offered a 0.25% reduction in business loan rates, and 0.80% reduction in fixed secured business loans (2-3 years). You can also defer payments for six months.

Each lender is different, so check with your bank or lender to see the options available to you. And if you’d like to apply for a business loan under the SME Guarantee Scheme, or you need more information about any of the above, get in touch with our team of experienced lenders to see how we can help your business survive COVID-19.

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10 Reasons To Use A Non-Bank Lender

When looking for a loan, you must do your research to find the best lending options. After all, this is a long-term investment that requires commitment. There are two main options for borrowing money: banks and non-bank lenders, and today, more and more people are looking to the latter.

A non-bank lender is a financial institution that offers loan products, but unlike a bank, cannot provide deposit accounts. Services generally include basic and full-featured home loans, variable and fixed-rate loans, commercial property loans, SFME loans, business loans, car loans, and sometimes even credit cards.

In the past, non-bank lenders were often considered to be the last resort for anyone applying for a home. Today though, this isn’t the case, and many people visit a lender before they even consider a bank.

Here are ten reasons to use a non-bank lender:

1. Competitive Rates

Because non-bank lenders are structured differently to retail banks, they often have fewer overheads. As such, they can turn these savings into lower rates on loans. In many cases, they’ll give you a better rate than the big four banks.

2. Flexible

If your circumstances aren’t the same as other people, it doesn’t mean you won’t get a loan. For example, if you have bad credit, or no recent tax returns, a bank probably won’t even look at you. A non-bank lender will.

3. Personal Service

The big banks generally have millions of customers around Australia. Non-bank lenders don’t – so they’re able to provide more personalised service for you. You won’t be talking to machines, and your credit score won’t be based on a machine. Instead, you’ll talk to humans who are dedicated to helping you.

4. They’re Safe

Non-bank lenders are financially secure institutions. They comply with the same credit rules and regulations as banks.

5. Lower Deposits

With big banks, you generally have to have a 20% deposit before you can buy your home. For some people, when paying close to $500,000 for a home, this seems impossible. Non-bank lenders have other options available and can work with deposits as low as 5%.

6. They Help Self-Employed

Someone who is self-employed will find it hard to get approved for loans with big banks. It’s all about the risk. Non-bank lenders, however, generally look at the last two years of financials and your credit history to make their decision.

7. Fast Approvals

When applying for a home loan, big banks don’t prioritise. And you could be waiting a while to get approval. Non-bank lenders, however, generally deal with fewer customers so you may not have to wait as long.

8. Variety

Non-bank lenders have a range of products available, from home loans to commercial property loans, loans for SMSFs, through to loans for self-employed or bad credit holders.

9. Lower Fees

When you get a loan, it’s often the unexpected fees that can end up costing more in the long run. Many non-bank lenders offer lower setup and ongoing fees than the big banks.

10. Regulated

Non-bank lenders are regulated by the Australian Securities and Investment Commission (ASIC) and Consumer Credit Code.

If you want to find out more, get in touch with our experienced team today. We’d be happy to discuss your loan options, start now by pressing the apply button below.

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How To Get A Home Loan With Bad Credit

If you have had a history of bad credit, you might be feeling a little uncertain about applying for a home loan. Particularly given how strict the banks can be. The good news is that with a lender, rather than the bank, you could still be eligible. Here’s how it works.

What is bad credit?

Bad credit stems from missed payments, whether through bills or loans, including:

  • If you’ve had a number of missed mortgage payments in the last few months
  • Adverse listings, including bankruptcy, court writs, judgements and defaults on loans
  • Unpaid bills or tax debt – these may not be on your credit file, but the banks will still look into the related supporting documents
  • If you have a bad credit history with the lender, you’re applying for the loan with
  • Too much debt – if your total liabilities are greater than your total assets
  • Problems with your company – if there is liquidation or receivership in place

How To Get Approved With Bad Credit

It might sound as though you have no chance, but it IS possible to get a home loan with bad credit. How? Follow these simple steps:

Apply with a non-bank non-credit scoring lender

Many lending companies use a system that’s called credit scoring – and this helps them to assess your application for a home loan. They put all your data into the system, and you get a credit score rating – and often, if you have too much debt or bad credit, you’ll be labelled as a bad risk. Most lenders will cut the ties then. A non-credit scoring lender will look further than your past, and they won’t rely on a computer system.  They instead talk to you and will focus on your current financial situation to make a judgement call.

Skip Mortgage Insurance

Once you have been approved by a lender, you still have to be approved by mortgage insurance. How can you avoid this? Have your 20% deposit, stamp duty and legal fees ready to go. This will save you the process of approval by a Lenders Mortgage Insurer.

Show That You’re Better With Your Money

If you’ve experienced financial hardship in the past that has created bad credit, you need to show that your current situation is better. Prove that you’re now paying all your rent and bills on time, show that you don’t have any debt and your credit cards are all paid off.

Wait For Your Records To Clear

If you have time to spare to buy a home, you can wait until your bad credit ratings have been removed from your credit file. For example, a court writ or default generally affects your credit rating for five years. If you can, apply for a loan after that time, and you’ll avoid any unnecessary knockbacks.

The best advice we can give is to talk to one of our experienced lenders. Our dedicated bad credit mortgage brokers can assess your current situation and let you know the best options available. Click the apply button below to start the process.