My home loan application was declined. Now what?
Category News
Applying for home loan finance is one of the most nerve-wracking things you'll ever do, because you know that the ability to buy the dream home that you've just found relies on your success in obtaining finance. However, the word "no" isn't necessarily the end of the road. Jawitz Properties takes a look at what your options are if you've been turned down in your initial application for a home loan.
If your application was turned down due to affordability
Perhaps you lost your heart to a property that was just out of your price range. If you are able to find a more affordable property that ticks all the boxes for your family, you could apply again straight away. You will not be penalised by the fact that you have recently been turned down on another home loan request. The other option would be to put your homeownership plans on hold for a couple of years and save up a bigger deposit so that the type of property you want becomes affordable for you. You can use our handy range of calculators to help you determine exactly how much you'll be able to afford.
If you were turned down because you only applied to one bank
The first thing to consider when you get that soul-crushing "no" from the bank is whether you've maximised your chances of success by applying to all the banks for finance. It is entirely possible - especially if you're self-employed - that certain banks will show less appetite for risk than others. Even if you have been a client of a particular bank for decades, they may turn you down when it comes to home finance - but another bank, with which you have no prior relationship or history - might accept your request for home loan finance.
The best way to streamline your home loan application process is through a bond originator like ooba. This service is offered at no cost to you, and you just need to fill in one set of paperwork, rather than doing an individual application to each bank.
If your application was declined because of financial health
To be granted a home loan, you need to have a good credit score, and a poor credit score is the most common reason for applications being rejected. The first thing to do if you have been rejected on this basis is to obtain a copy of your credit report and ensure that there are no errors in it. If all the information is correct, and your credit record is legitimately not what you need it to be, it's time to take action. If you have no credit history, you can start by taking out a cellphone contract or opening a retail account. This will enable you to build a track record of repaying your debt timeously and being financially responsible.
If existing debt is the issue, try to pay this off as quickly as possible. Showcase your trustworthiness by paying more than the minimum instalments on your existing debt and avoid applying for any other loans. Once you're on the road to credit rehabilitation, it's best to wait about six months before making another application for a home loan. Don't lose heart - you may not be able to buy your dream home right now, but the reality can always be changed in the near future.
If you need help or advice with any aspect of buying or selling property, you can rely on our Jawitz Properties team, that has built up a wealth of knowledge and experience, to put you on the right track. Get in touch with one of our property practitioners or an ooba bond originator and make your home dreams a reality.
Author: Jawitz Properties
