Understanding Loan Declines

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Today's episode is one I wish more people heard before they give up on their dream of owning a home . Let's talk about what happens when your loan application is declined and , more importantly , what to do next . First of all , if you've been declined by a bank I want you to hear this clearly it's not the end of the road . Too often people get that one no and think their chances of buying a home are gone . But most of the time it's a matter of understanding why it happened and taking the right steps to improve your position . So why do banks say no , let's break it down .

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There are usually a few main reasons a bank might decline your application . The main one that

Why Banks Reject Applications

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we usually get is a credit history , so missed payments , defaults or too many short-term loans . We also have income issues Not enough stable income or your income is too variable . Too much debt , including car loans . Afterpays , credit cards yes , even the ones you don't use . Insufficient deposit , especially if you're applying with less than 20% deposit and a most common one when you already found the property is unsuitable property for the bank . So the home does not meet the bank's criteria and sometimes it's just the wrong bank for your situation .

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So what to do immediately after decline . First , do not panic and please don't start applying at 10 other banks on your own . Every application

Steps After a Decline

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hits your credit file and multiple hits in a short period can lower your credit score even more . But instead ask for a clear reason for the decline . Get it in writing , if possible . Check your credit report you can do this for free in New Zealand via Centrix or Equifax and then , of course , talk to a mortgage advisor . And yes , this is where I can come in Now how a mortgage advisor can help . This is not just about shopping around for a better deal . It's about strategy and , as a mortgage advisor , I'll look at the strengths in your application ,

Working with a Mortgage Advisor

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which lenders are more flexible with your profile , including second tier lenders or non-banks if we have to and how can we build a short-term action plan if you're not quite there yet ? And sometimes we set a three or six months fixed plan , like clearing your debt , boosting the savings or getting more stable income , and then reapply with a much higher chance of success . A quick success story .

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So one of my clients let's call her Maria came to me after a major bank told her no ,

A No Isn't Forever

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she was a single mom running her own small business and the bank didn't like the self-employed income . We worked together to restructure her debt , tighten up her business financials and submit it to a different lender that understands self-employed borrowers better . Four months later , she had the keys to her first home . And no does not mean never . It just means not this way . So if your loan was declined , don't carry the shame or fear . It's a signal , not a sentence . It just means it's time to get smart , build your plan and work with someone who can guide you through this maze . I'm here for that and I'm only a message away . Thanks for tuning into the Home Loan Hub . If this episode helps you or someone you know , share it , subscribe it and leave me a review . It helps more people find their way home . See you in the next episode .