Can a broker get you a loan after your bank says no?

You’ve been banking with the same institution since you got your first part-time job in high school. You used them for your first credit card and started stashing your house deposit savings in one of their high-interest accounts – so when they turned you down for a mortgage, it was a real slap in the face.

The good news is, it doesn’t have to spell the end of your property dreams.

A mortgage broker can help you secure a loan, even after the bank has knocked you back. Here’s how:

All banks are NOT created equal

Did you know that every lender uses different policies and criteria when assessing your application – even if they’re from the same parent company? Westpac owns RAMS and St George, for instance, but all three lenders have varying policies and procedures.

A broker has access to this information, and can match you up with a lender whose policies best suit your circumstances.

Broker solution: To do this yourself, you’d have to go to each lender individually and assess their loan criteria and policies. Using a broker means you can bypass this hassle and head straight for the lender most likely to approve your application.

Protecting your credit rating

When you apply for a loan, it’s important to note that it will be registered on your credit file, so you don’t want to shop around too much.

Enquiries into your credit file, which happen each time you apply for any kind of finance or credit (even entering a mobile phone contract), can have an effect on your ability to get credit in the future. The last thing you want to be doing is applying for loan after loan, hoping to find a lender who will approve you, yet all the while actively destroying the likelihood that you’ll ever be approved due to the large number of enquiries building up on your credit file!

Broker solution: Lenders don’t like serial applicants, so rather than tackling a new home loan application on your own, let your broker match you up with a suitable product first time round, to avoid this trap.

Getting your ducks in a row

A good broker will be able to tell you what you can do to improve your chances of being approved for a loan – for example, waiting until you’ve been at your job a few more months before you apply, or closing the credit card with the large limit that’s reducing your borrowing power.

Brokers are also experts in low-doc loans, perfect for those who are self-employed or have a hazy credit history. They’ll also run their eagle eye over any documents, to ensure they are correct and presenting you in the best possible light, so as not to hold up the application process.

Broker solution: A good broker will be able to tell you exactly what paperwork you need to apply, and how to get around any obstacles in the criteria set by different lenders.

You could end up with a much better deal

It’s to the broker’s advantage to get you the best possible deal, as their commission may depend on you keeping the loan for a certain period of time without refinancing.

They will also be hoping you give them a good review, as many brokers (including us!) build their business partly from referrals – so it’s always in our best interests to do the best thing by our clients.

By working with a broker, you could secure yourself a loan with a much lower interest rate or bonus features, potentially saving you tens of thousands of dollars over the life of the loan. Whether you are an investor or a homebuyer, if you would like further information and guidance about securing finance after your bank has said no, contact the team at Multifocus Properties and Finance for an obligation-free chat.

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