The Bank Said No – Where To Now?

Have you applied for a home loan with your bank only to find that you don’t meet the ordinary bank criteria? Don’t despair, there are other mortgage types available and banks are not the only lending option for home loans. A mortgage broker will be able to explore alternate options that may work for your personal situation.

Banks Have Strict Mortgage Criteria

Because of the sheer volume of home loan applications that banks receive, they have strict approval criteria in place. If your application does not tick all the boxes, you may find that it is rejected. Banks do not like to lend money to those that may prove a bad investment.  Unfortunately not all people who are denied a mortgage from the bank are a bad investment.

Banks may consider you a bad investment if you:

• Have bad or patchy credit history
• Fall outside of their age range
• Have little or no deposit
• Are recently self employed

If you have been denied a home loan by a bank, or have fears that you don’t meet the standard criteria, then don’t panic. A mortgage broker may still be able to help you secure a home loan. There are a number of other options that a mortgage broker can help you explore. These can range from low and no deposit home loans, to alternate lenders.

Low Deposit Home Loans

If you do not have the funds equivalent to a 20% deposit for the home you wish to purchase, then a low deposit home loan could be the answer. Some lenders will give you the option to buy a home with less than a 20% deposit. You may find that you will need to pay a low equity fee, or the interest rate might be slightly higher to accommodate for lack of deposit.

No Deposit Home Loans

Some providers will allow you to borrow a certain amount of money to purchase a home with no deposit. That means they will offer you finance for the full amount of the property you are purchasing. Extra fees for low equity apply and can be paid upfront, or added to your mortgage.

Interest Only Mortgage

The repayments for an interest only loan are lower than standard table mortgage payments. This is because you are only paying the interest portion of the loan, but none of the principle. It will take longer to pay back this kind of mortgage, as you are not paying back any of the original amount that you borrowed.

Negotiating Interest Rates

Bank advisers will only give out standard interest rates on home loans. A mortgage broker has the ability to negotiate between lenders, so can secure a better interest rate then the carded rates of the bank.

Alternative Finance Options

Home loans don’t only come from banks. Mortgage brokers have a relationship with many different lenders, meaning that there is a bigger range of options available. The interest rates might be slightly higher, or there may be higher application fees. Despite the fees, it might still get you on the property ladder.

Don’t be discouraged if you have received bad news from the bank regarding a home loan application. There are still options out there and a mortgage broker might be able to help. These range from low and no deposit home loans, to alternate finance options. Traci-Lee is the mortgage broker that will go above and beyond to help you. Traci-Lee specialises in applications that are outside of ‘the norm’ and has done wonders for many of her clients. Get in touch with her now.