Beware of the Online Pre-Approval

Instant online pre-approvals are not worth the paper they are written on...

Imagine getting pre-approval from your lender either over the phone, online or even at your local branch and to find out that once you have made your purchase your loan was not accepted. 

Often  these cries are heard from bewildered borrowers not understanding the very reason why their loan was no accept once it went through the full credit process. The problem here is part lender and part borrower.

 

Possible Reasons Why A Loan Was Not Accepted

- The borrower miscalculates their actual income. Some lenders will not take into account over-time or casual jobs

unless they have received this income for over a two year period. Therefore, the maximum amount you can borrow may be significantly less than what you need to make the purchase.

- Online systems may not pick up credit defaults held against your name. Having credit defaults can significantly reduce your chances of your loan being accepted

- The purchased property falls outside the lenders policy and the borrower may need to come up with a greater deposit.

- Borrower may not have a suitable deposit

- Borrower may not have stated all financial commitments and dependents

- Self employed applicants may not be accepted because they have not had their ABN registered for a minimum of two years and or registered for GST.

- Self employed applicants are generally assessed on the average of two years income and not the current year.Therefore, inaccurate reporting of income may lead to a lower borrow amount 

 

How to Get a Genuine Pre-Approved Loan

The best way to legitimately apply for a genuine pre-approval is to have your entire application assessed by the lenders credit officer. This means supplying the application and all the supporting  documentation required for assessment. Once assessed and you are granted pre-approval, only then can you be reasonably confident that your loan will be accepted when you make your purchase. 

Depending on the lender it normally takes 24 to 72 hours to assess your application and make an offer. Also, pre-approvals can be valid for 3 months to one year. 

So forget about the instant online, over the phone or the bank pre-approval because they are not worth the paper they are written on. Get you application fully assessed to avoid future disappointment. 

 

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Need Help?

To find out if you can apply for a loan it is best to contact one out mortgage experts. They can show you all the all the hidden costs and restrictions as well as show you the most reputable lenders to choose from.

 

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