Dana from Mortgage Broker Melbourne recently said that in her experience, 3 out of 5 potential borrowers that find their mortgage application rejected may go on to give up on their efforts entirely. With Australian banks now being more selective with their approvals than ever before, it’s safe to say that experiencing a rejection can be disheartening to say the least – but is it really the end of an application?
Not according to Dana
She states that although a rejection can have emotional consequences as well as financial ones (such as the fact that some banks will make a note of who they rejected and why), these events really can be dealt with; especially when seeking the guidance of a professional. And who are these professionals? Well according to industry experts, mortgage brokers can offer a much more effective way to apply for a home loan – whilst minimising the risks of repeat rejection.
Re-applying for a mortgage after a rejection
Although some banks might not be willing to reconsider an application from a potential borrower that they’ve already rejected; that won’t rule all lenders out. There are four ‘big banks’ in Australia as well as a multitude of other smaller lending agencies; and if they all have one thing in common; it’s that they are constantly competing to outdo the others.
Where one might have said no for any number of reasons (typically due to a bad credit score, a lack of trust when it comes to repayment, or other similar events) – there are those that will consider an application regardless of what another bank might think. And this is where mortgages can really be taken advantage of.
With a friendly home loan broker on the side of the applicant, it can be possible to rectify any issues that may have cropped up (and led to the initial rejection), whilst being able to turn to the types of lenders that might be more inclined to provide their cash to a borrower. With options to compare interest rates and find the most affordable mortgage deals and packages – a broker won’t just be able to help an applicant save money; they should be able to maximise the chance of an approval.
And how do they do this?
It can be far more likely that an applicant will be greeted with an approval if they are on top of their finances. The likelihood will also increase if those same borrowers approach banks that offer more flexible repayment terms. For instance, if a rejection occurred because a lender felt that the borrower wouldn’t be able to keep up with their repayments – the applicant might be better off finding a cheaper repayment plan, or agreeing to fairer terms.
A broker can help by ensuring that all of the right boxes are ticked before an application. When it comes to re-applying after a rejection, they can also assist by identifying the causes and helping to rectify them.