Has your bank said No?

Has your bank said No?

Have you recently been told “No” or come back in 3 months? Well I have some news good news and some tips for you.

Here’s the good news. Just because one bank says “No” it doesn’t mean to say all the others will too. Have you tried more than one bank?

Sometimes your bank knows too much about you, which might be good and bad, but sometimes it is because you aren’t a new customer, so they don’t try as hard. Many people have told me that they have been with their bank for 10+ years, but it doesn’t seem to count for much anymore. A great shame.

So here’s a few tips to get you going;

Bank Statements

As strange as it may sound, check the last 3 months bank statements are clean and by this I mean; No going into overdraft when you don’t have one arranged. This is on its own can be an excuse for the bank to say No

Credit History

Check your credit history. One way to do this is via www.creditsimple.co.nz

It can be interesting to see what your score is and if there is anything you were unaware of or had forgotten about.

If there is anything outstanding, it is best to get this paid before applying for finance and to have a good written explanation which should go in with the loan application.

Small defaults usually under $500 can be forgiven if paid, but once the number rises to over $1,000 your options start to become more limited. If the debt is still outstanding your chances continue to deteriorate.

You have be warned. You don’t have to be declined, it might just mean you need another lending option.

Personal loans, Hire Purchase and Credit Card debt

This is a favourite subject of the lenders. They don’t generally like to see loans above $10,000 unless you are self employed and the loans are necessary for business purposes or you are on a very high income.

Credit card limits do count against you. For example, if you have a credit limit of $10,000 the bank will apply 3% of this or $300 and enter it into their servicing calculator. This will obviously mean your loan amount will be reduced.

So best to have little or no personal loans and a low credit card limit when applying for a mortgage.

New job or job promotion

So often I hear someone talking about getting a pay rise or perhaps starting a new job.

You will be amazed as to what a $5,000 pay rise can do for your borrowing capacity. So if you are due one very soon then perhaps hold off applying for a month or two.

Another thing I hear is “Oh I have just started a new job and got more money and a car and medical insurance.” Now this is great, but there is a slight problem. If your contract states that there is a 3 month probation period, then you won’t be considered for a loan until you are through this period.

The above should get you started, but if you have a very urgent need for finance and would like some advice and a helping hand, then please email or phone me or get in touch via Facebook- davidpaulinmortgages