What 2 Things Should You Do If Your Lender Rejects Your Loan Application?
In 2019, industry insiders estimated that the home loan application rejection rate stood at 40% in Australia. The good news is that several ways to improve your financial position exist. Mortgage House encourages homebuyers to do two things after a mortgage application rejection:
- Seek feedback from the lender
- Use the feedback to improve your mortgage prospects
Common reasons why home loan applications receive a rejection include little to no employment and credit history. Missing documents is another reason. Based on the feedback the homebuyer receives, it’s important to put it to use. Sometimes a loan mismatch exists. For example, investors benefit from interest-only mortgages while first-time homebuyers benefit from a family pledge home loan.
A homebuyer requires financial stability during the application process. Lenders assess the applicant’s financial ability to repay the debt. They use several lenders’ ratios to stress test the applicant’s finances. It’s OK to start with a starter home and move into the dream home five years afterward. Finance professionals believe that it takes five years to build meaningful home equity. That’s paper wealth that homeowners can leverage into better loan terms and a better house.
Mortgage House loan specialists have the tools to efficiently evaluate all mortgage applications. Then, they make themselves available to answer questions from clients.
Try our Mortgage House online home loan calculator with no strings attached.
Loan Application Rejection Conclusion
After a loan application rejection, Mortgage House encourages homebuyers to ask the lender for feedback. Then, work to improve your financial position. Our loan specialists remain ready to answer your questions. Contact our team today.