Top 5 Tips to avoid your Loan Application being rejected
Lenders have got tougher in their lending criteria over the past 12 months due to the global financial crisis and tighter credit markets. Here are some tips that will help you when applying for your loan:
1. You need to demonstrate Genuine Savings. The days of lenders offering loans to purchase a property with no deposit are behind us and lenders require borrowers to demonstrate genuine savings. These are funds you have accumulated from savings or selling another property. More important, is what it doesn't include. It doesn't include gifts from family members, wins at the races, or proceeds from garage sales etc. If you do have a deposit from any of these sources it needs to be in your bank account for 3 months to qualify as genuine savings.
2. Pay your Credit Cards on time and keep them below their limits. Lenders have become very nervous about borrowers that either pay their credit cards late or go over their limits. If you can't look after the smaller things in life like a credit card, then lenders worry whether you can look after the bigger things in life like a mortgage.
3. Pay any outstanding bills such as unpaid mobile phone accounts. Unpaid accounts show up on your credit file and lenders generally will not provide finance to borrowers with unpaid accounts on their credit file. You can obtain a copy of your credit report by contacting Veda Advantage.
4. Don't have too many credit enquiries on your credit file. Applying for Interest free items at stores and taking up credit card offers in the mail are all noted on your credit file. Too many personal credit enquiries can make lenders nervous that you may be living beyond your means so only use these types of finance arrangements if you absolutely need to.
5. Casual wages income. Most lenders will only accept casual wages as income for lending if you have been in the same position with the same employer for over 12 months. However, if you are permanent part-time lenders will generally accept this type of income after you have finished probation. So if you have a choice between being made casual or part-time when you start a job, go with the part-time position if you are looking at buying a home in the near future.