What Can Make Your Home Loan Application Knock Back?
Rejection of the home loan application can be a disappointing situation. When you have finally decided, which house you want to buy in the property market then declined home loan application can be a major setback in the home buying process.
Fortunately, there are several ways to decline the chances of home loan rejection. One of the best possible solutions is to avoid the reasons that can make your home loan application knockback. Some of the reasons are given below that you should avoid while applying for home loan in Australia:
- Not enough income
Lenders will confirm your total income to ensure if you would be able to repay your home loan. Your income source can be your job, rent or business. If your lender discovers that your total income is not enough to repay the amount then you may have to face the application rejection.
- A lot of Existing debts
Lenders will consider your existing debts while processing your home loan application. Whether you have taken any personal loan, commercial loan, car loan or any other type of loan, the lender will assess all these loans to find out that how you would be able to repay the home loan along with all these loans.
- Not enough deposit
Most of the lenders ask for a deposit that varies from 5% to 20% of the total amount. The deposit that you have saved depicts that you have started developing the financial discipline. You may have to deal with the rejection of home loan application if you have saved less than 5% for the deposit. However, if you do not have enough deposit then you can consider applying for no deposit home loans.
- Not acceptable property
Buying a unique property of less than 50 square meters or those in extremely rural areas can be the cause of declined home loan application. Reason is, lender considers your property as the security on your home loan and in case, you would not be able to repay the home loan, the lender will sell the property to recoup the loss.
If you don’t want to deal with the home loan application rejection then make sure to follow the above-mentioned things.