Smartline’s mortgage brokers are spending more time preparing loan applications and gathering sometimes hundreds of pages of supporting documentation to secure loans for clients – leaving ‘no stone unturned’.
That’s good to know, because there’s a range of factors that can see a loan application being refused. But, the trend indicates that the more information and supporting documentation you can provide, the better the chance of having an application approved.
While it’s certainly more challenging and time-consuming – especially for those who aren’t familiar with lenders’ conditions and requirements – it doesn’t mean that obtaining a loan is impossible.
It does highlight the importance of quality advice to give you the best chance of securing your loan and purchasing a property.
Considerations impacting lenders’ decisions
Credit scoring is just one consideration impacting lenders’ decisions and although it has been around for a while, the credit scoring formula is becoming increasingly complex and relies upon every piece of customer data – so it has never been more important to complete every single section of the application form.
In some instances an applicant might lose points for seemingly simple things like not having the ‘nearest living relative in Australia’ field filled in – even though it’s not mandatory.
While employment details and stability used to be the keys to a successful loan application – including employment history, having minimal unsecured debt, strong ability to service a loan, a clear savings history and a deposit – lenders now want to see evidence that applicants have a ‘reliable character’.
For example, lenders don’t want to see too many credit inquiries, which can lower your credit score.
Likewise, while an applicant’s net asset position <link to: Net Asset Position blog entry – yet to be published> has always influenced the way banks lend money, this has become increasingly important.
The rules are always changing
Lenders’ rules about how they assess loan applications are in a state of constant flux.
It’s not unusual for lenders to change their own requirements, and we’re seeing a definite trend toward the requirement for more and more detailed information.
Using the services of an experienced mortgage broker can be helpful for borrowers keen to cover all their bases and make a good impression on lenders.