With the phenomenon of instant loans and repayment conditions that favour the lender, it pays to think wisely before making your home loan decisions.

In the deregulated and competitive marketplace of the 21st century, most lenders will accept a five per cent deposit, with the provision that they be covered by a one-off mortgage insurance payment. 

But first and second-time buyers, particularly the latter with investment properties, can still experience rejection from lenders. It is important not to take the rejection personally and turn the negative into a positive. 

Instead, one should ask why the application had been turned down and what steps can be taken so the reply will next time be in the affirmative. 

Getting a second opinion pays off

Seeking a second opinion from another lender will always benefit the borrower, as lending institutions can have different criteria to meet before approving a loan. 

It is usually in a lender’s best interest to say ‘yes’, so you should leave no stone unturned in attaining that goal. 

The most likely change is to rework the budget to provide for a larger deposit, so it is important to inform the lender of any changes in your circumstances, such as a wage raise, inheritance or paying off a long-term debt. 

Obtaining finance to buy a home can present a challenge we could all do without, but working as a team towards the common goal can overcome the hurdles to reach your goal.

Top tips for mortgage approval

Buying sensibly and within your repayment range is the first step for novice or first-time borrowers. Equally, displaying proof of a healthy credit rating and borrowing history also plays to your advantage with lenders.

Family, buying with friends and guarantor assistance also speak volumes to financial institutions in terms of support and reliability. 

Breaking down your debt repayment methods with achievable options also helps to pave a clear path for borrowers and lenders. This, in turn, instils trust and confidence for both parties.  

Take advantage of government stimulus and other financial incentives that spur home loan approval and your repayment plans. 

Maintaining a strict budget while adopting a savings strategy also provides peace of mind and is designed to tick boxes when seeking mortgage approval.