{"id":5187,"date":"2022-11-17T08:16:53","date_gmt":"2022-11-16T22:16:53","guid":{"rendered":"http:\/\/financialplus.com.au\/\/?p=5187"},"modified":"2022-11-17T08:16:53","modified_gmt":"2022-11-16T22:16:53","slug":"5-surprising-reasons-for-home-loan-heartbreak","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/5-surprising-reasons-for-home-loan-heartbreak\/","title":{"rendered":"5 surprising reasons for home loan heartbreak"},"content":{"rendered":"

\"\"Whether it\u2019s your love life or your home loan application, no one likes getting rejected. There are many reasons why it could happen, and some can come as a big shock. So today we\u2019ve outlined five surprising reasons to help you avoid home loan heartbreak.<\/strong><\/p>\n

There are few words would-be home buyers dread more than: \u201cyour home loan application has been rejected\u201d.<\/p>\n

It can feel like a real kick in the guts. And some of the reasons can be surprising.<\/p>\n

A rejected loan application can hold up your home-buying plans and could have a negative effect on your credit score. So it can be important to avoid this scenario.<\/p>\n

Below we\u2019ve outlined five reasons your next application could be rejected \u2013 so you can start heading them off now.<\/p>\n

1. Spending too much or too little<\/h3>\n

Most people know that spending too much is a major red flag for lenders. So limiting your unnecessary expenses is important.<\/p>\n

But drastically slashing costs and living a very meagre existence can also be a concern.<\/p>\n

Lenders can see this as unrealistic and unsustainable, and they can remedy it during assessment by applying the household expenditure measure (HEM) instead.<\/p>\n

HEM is a standardised benchmark used to estimate annual living expenses. And if your standard, reasonable budget is on the super savvy frugal side, there\u2019s a chance HEM may be higher.<\/p>\n

2. Credit cards<\/h3>\n

Having multiple credit cards and performing several balance transfers can affect your application.<\/p>\n

Every time you apply for credit an inquiry is logged on your credit history. And lenders will likely take notice.<\/p>\n

Even your \u201cjust in case\u201d credit card can have an impact. You may need to prove you have the means to pay off the limit within three years, even if the balance is $0.<\/p>\n

3. By now pay later services<\/h3>\n

\u2018Tis the season for shopping. And buy now pay later (BNPL) schemes will be rolling out the red carpet.<\/p>\n

But it might be worth resisting the temptation.<\/p>\n

The Australian Prudential Regulation Authority (APRA)\u00a0amended its framework this year<\/a>\u00a0to include BNPL debts in the reporting of debt-to-income (DTI) ratios.<\/p>\n

Lenders will likely include BNPL debt in your DTI ratio to see your total debt in relation to your income. And a high DTI can result in limited borrowing capacity or even rejection.<\/p>\n

4. Credit history<\/h3>\n

Your credit history is a finicky thing.<\/p>\n

Even a few late payments can cause your credit score to drop. So it\u2019s important to make sure your bills are paid on time.<\/p>\n

Also, applying for too many credit cards or other loans can impact your credit score, and therefore your home loan application.<\/p>\n

And with increasing news of scams, data breaches, and identity theft \u2026 it\u2019s a good idea to check your credit history health.<\/p>\n

You can request a free credit report once a year from one of three national credit reporting bodies which are listed on\u00a0this government website<\/a>.<\/p>\n

5. Your type of income<\/h3>\n

Your type of income could make or break your application.<\/p>\n

Lenders typically favour traditionally employed applicants with a steady and reliable income.<\/p>\n

Many lenders consider self-employment carries a greater risk for less consistent income, and some can reject applications on these grounds.<\/p>\n

So if you\u2019re self-employed, when applying for a home loan it\u2019s important to target lenders who are more open to lending to small business owners (we can give you the down-low on this).<\/p>\n

Also, word on the street is that tax debt is increasingly becoming an issue for self-employed applicants. So if you have a large tax debt, it might be worth getting on top of that if you can.<\/p>\n

Get in touch<\/h3>\n

If you\u2019re not the kind of person who likes being rejected, well, the good news is that we\u2019re not the rejecting type.<\/p>\n

We\u2019d love to have a chat about your home-buying dreams to see if we can match you with the right loan and lender for you.<\/p>\n

Disclaimer:<\/strong>\u00a0The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.<\/p>\n","protected":false},"excerpt":{"rendered":"

Whether it\u2019s your love life or your home loan application, no one likes getting rejected. There are many reasons why it could happen, and some can come as a big shock. So today we\u2019ve outlined five surprising reasons to help you avoid home loan heartbreak. There are few words would-be home buyers dread more than: […]<\/p>\n","protected":false},"author":23,"featured_media":5188,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[110],"tags":[],"class_list":{"0":"post-5187","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-home-loans","8":"entry"},"yoast_head":"\n5 surprising reasons for home loan heartbreak · FinancialPlus Mortgage Broker Gold Coast<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/finance-matters.info\/2022\/11\/16\/5-surprising-reasons-for-home-loan-heartbreak\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 surprising reasons for home loan heartbreak · FinancialPlus Mortgage Broker Gold Coast\" \/>\n<meta property=\"og:description\" content=\"Whether it\u2019s your love life or your home loan application, no one likes getting rejected. 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