So you are sick of wasting money on rent and know that you can afford a home loan but the bank says it can’t approve your home loan.
You have checked on the online mortgage calculators and it is quite within your budget.
But the bank keeps saying you cannot afford to buy a house.
Why The Bank Say’s “NO”
What you need to know is why the bank says “no” … the real reason, not some jargon.
Too often the bank gives you some gooble-de-gook rather than making common sense and that can be just as frustrating as them saying they can’t approve your home loan.
You may have spoken to a mortgage adviser too and got the same types of reasons, but then most mortgage advisers are ex-bankers so that’s not really surprising.
Banks are in the business of lending money, but they are also often overly cautious and that can mean that they seem to make decisions that do not really make sense.
For a start when they calculate to see if you can afford the loan they do not use the actual interest rates being offered, but instead use a “test rate” which is a lot higher. Some of the banks test rates will be over twice what the actual interest rates are and that can be the difference between having the bank approve your home loan or decline it.
There is a range of other criteria too that forms a banks lending policy.
The bank may say “no’ for a number of reasons including the way they calculate your income, how they treat your expenses and other debt or it may be that they do not like the type of property that you are wanting to buy.
Learn What The Banks Want
As a first home buyer you are going into uncharted territory when you start speaking to a bank about getting a home loan, and this is one reason that many people will not look to using a good mortgage adviser to help guide then through that part of the process.
This is one of the key reasons that we created the first home buyers course called your Pathway to Home Ownership too.
When you are buying your first home you need to know that you have access to all of the information so you can make smart decisions.
Even if your bank could approve your home loan, would you be comfortable to trust that you are getting the best home loan?
Maybe it’s time to learn more about how the banks think and learn what you need to do to ensure that the banks approve your home loan application.