What the lenders don’t want to see

If you want to improve your chances of being approved for a home loan, you should try not to take on any other big debts in the six months before you apply.
That’s the advice of Hano Jacobs, CEO of the Realty 1 International Property Group, who says: “Banks don’t like to see too many recent requests for credit clearance on your record, so this is not the time to buy a new car or furniture on a hire purchase agreement.”
“In fact, you might even think twice at this stage about taking out a new cell phone contract or applying for a new store card.”
He says homebuyers should also do their best not to change jobs while in the process of applying for a home loan. “Lenders look for employment stability, so if your reason for moving house is to take up a new position, you will need confirmation of this from your new employer to accompany your home loan application, in addition to your salary records from your current job.”
In addition, homebuyers should not try to conceal anything in their financial past from the lender. “If you have borrowed the cash to pay the deposit and will have to repay it, say so. If you have had credit problems in the past, admit to these too. 
“Today’s sophisticated credit checking systems will inevitably reveal the whole story, and once lenders find you have been less than truthful about one thing, they will naturally start to question the rest of your home loan application and once that happens, the chances are very good that it will be declined.”
Two further pieces of advice for homebuyers, he says, are not to go on a spending spree for their new home if their home loan application is approved, and not to proceed with an application if a change in their circumstances means they will not be able to afford the repayments.
“Some additional expense on a new home is to be expected, but you should resist the temptation to splash out and deplete your cash resources at least until you have taken transfer and established the actual running costs of your new home over a few months.
“And if something should happen that makes a big change to your financial picture, such as a disabling accident or a retrenchment, for example, it is not a good idea to proceed with an application in the hope of securing the loan before the bank finds out what has happened. If there is a good chance you will not be able to repay the debt, you should rather withdraw the application - and keep your credit record intact.”
Issued by
Realty 1 International Property Group

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