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8 Mistakes To Avoid When Seeking A Home Loan Application


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Finding the home of your dreams is so exciting. But, imagine how upset you would be to find out your home loan application is declined. Fortunately, that doesn’t have to happen to you. We’ve put together a list of mistakes to avoid when preparing your application.



1.    Don’t look for a home before finance

There is little point spending time looking at homes you can’t afford. It may well end in heart break that could have been avoided with a pre-approved loan. Getting preapproval means your finance is organised and you know precisely how much you can afford.



2.    Tarnished Credit

Lenders have access to your credit file, so take your credit into consideration first. Before you submit your home loan application, get a copy of your credit file so you know what the bank will see, what you can clean up, and if anything needs rectifying.



3.    Making too many applications

Every time to submit an application, it is recorded in your credit file, but won’t reveal if you were declined or approved. Too many applications looks as though you have been declined which can make lenders feel nervous.



4.    Failing to explore all your options

There are loads of different types of loans available, including fixed, split, and variable, and each offers a range of different features. Consult experts on Central Coast home loans as they can help you pick the best type of loan for your needs, but do get to know the differences yourself so you have a good understanding of which will work best for you.



5.    Taking on more than you can reasonably afford

Just because you are able to service a particular amount really doesn’t meant that you have to. Instead, make sure you factor a buffer into your budget so that if rates increase, your lifestyle won’t have to suffer.



6.    It doesn’t have to be all about interest rates

Interestingly, the low that has the lowest interest may not be the cheapest in the long run. There are charges and fees on top that can make the finance more costly than a loan with a higher interest rate. A great tool is the comparison rate which usually factors in additional expenses and gives you a better indication of value.



7.    Switching jobs

Lenders favour stability, so if you are keen on changing jobs, don’t do it! Starting a new job means probation periods which need to be completed before you will even be considered for a home loan.



8.    Not using home loan repayment strategies

One you have your home, there are a variety of easy techniques that can help you to pay your loan off sooner, but also save you a heap of cash in the process.



Reputable mortgage lenders will offer financial planning services for wealth creation, mortgage elimination, and, importantly, budgeting advice to help you with your home loan application.



How comfortable are you at preparing your company’s financial forecast?