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.

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