Finance rejected? What now?

12 May 2023


It's a buyer’s worst fear… Finding that perfect home after weeks (maybe months of looking), having your offer accepted, only to have finance fall through!

With the latest crackdown on lending and rising interest rates, banks have never been more diligent with their credit checks, so it’s more important than ever to ensure you have all your ducks in a row before making an offer on that dream home.

To avoid disappointed we always recommend obtaining pre-approval prior to even thinking about making an offer. Having said that, every situation is different and pre approval is not always possible, especially if you need to act quickly.
If you’ve had your finance fall through – don’t panic. Take a step back and look at your options.

Put it into perspective
The market is diverse with lenders offering an array of different criteria for mortgages, and one setback does not mean that you won’t receive finance through another bank or financial institution.

If your finance has fallen through, there are steps that can assist with getting back on track for an approval the second time around.

Ask why
First things first, you need to understand why your application was rejected. Your lender should be able to tell you the reason for their decision which you can then work on fixing. It may have been as simple as missing a question in the forms or as complicated as a poor credit rating.
Find yourself a good broker
Don’t just re-apply with another broker. You’ll most likely get the same outcome. Our advice is always – don’t go-it alone. A mortgage broker is your best friend when applying for a home loan. Not only can they compare the market for you to ensure you receive a deal that suits your circumstances, they know what lenders are looking for and can navigate the heavy paperwork and questions to ensure you tick all the boxes.
Their services are free, so you have nothing to lose.

Bad credit history?
Very often, applications are rejected because of a bad credit history. Before you apply again, you will need to solve any outstanding issues with your credit file. Bad credit histories are one of the most common reasons loans get rejected and more often than not, the bad rating has come from something as minor as an unpaid phone bill.

*Remember to always pay your bills on time- the more reliable you appear financially, the more you will appeal to lenders.

Debt consolidation
If your existing debt was the reason for the rejection you may want to look at clearing some before applying again. Another option could be debt consolidation or reducing your credit card limits. A mortgage broker can advise on the best direction for you.

Remain realistic
One set back does not mean it’s all over. There are plenty of lender options out there so there is good chance that one will match your needs, but you may need to be more realistic about what you can afford.

If you are rejected for a loan the key is not to panic. Loan rejection isn’t uncommon and it doesn’t mean that you will never be able to secure finance… 

The information contained herein is for informational purposes only and should not be solely relied upon as financial advice. Please contact Peard Finance for an individual assessment of your finances today.

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