Let's talk about the bad financial habits that we as mortgage brokers come across from
applicants wanting a loan. These are 7 things that you should be avoiding so
you can help your broker achieve a positive result from your application.
1. Betting: Do not have any gambling habits evident in your
statements: This is a little controversial because I understand that people do
like to ˜have a punt' however if it is all based on habits VS income. E.g., I
have seen an applicant with a $1,200 a month ˜habit' on a 60k income. That is not
going to fly as you are spending half a mortgage payment on gambling per month
with no evidence that it can be stopped when needed. This includes online
sports betting etc
2. Adverse consumer behaviour: If you are ordering Uber Eats
5 times a week and blowing money on clothes every month etc and living pay
cheque to pay cheque but you are hoping on a deposit from mum and dad, your
spending habits will come into question. Just remember that just because the
bank will take your parents as guarantors, does not mean that they will not
scrutinize your spending patterns/behaviour and if they don't like what they
see, your loan will be rejected.
3. Undisclosed Debts: Tell your broker everything, the good,
the bad and the indifferent. Do you have a HECS debt? Do you have BNPL
accounts, tell us every credit card you have and what you owe. Have you missed
payments? There is no hiding any of this in 2024. Run an Equifax report on
yourself and you can see what the banks will have access to.
4. Do not sign a property contract: This is a big one and
what I see as a massive goal, do not assume that just because you earn good
money that you will be a good candidate for a loan. There are multiple things
that are assessed (including all of the above). Do not sign a property contract
(especially under auction conditions where you have put down a sizable
deposit), you are basically risking this money until your approval comes
through. You are also on a time restriction as you need an approval by a
certain number of days (5-7 usually). I have seen people royally screw
themselves over in these situations.
5. Adverse payment history: Make sure that any credit that
you currently have is paid on time, you need to show a history of this (usually
3-6 months) where you need to prove that you can handle making payments on
time
6. Do not Lie: This one is obvious but if you are caught
lying about anything on your application (whether it be living expenses,
existing debts, no of kids, age of kids etc) you can very easily get caught
out.
7. Do not change jobs in the middle of your application: There
are rules to this one, however if you are getting a promotion within your
existing company that's fine.
There are some lenders that do not mind however if you are
not applying with that lender, you can kiss your application goodbye (speak with your broker).
