Many people have a combination of various debts. They may have personal loans, credit cards, car loans, HECS debts and the like. When it’s time to list them all on a home loan application, it’s easy to forget one or two. But this innocent mistake can have dire consequences.
What happens if you don’t disclose all your debts.
If you fail to disclose a debt on a home loan application, it causes several problems. For a start, most lenders will immediately decline your application. This leaves you with a mark on your credit file, and no home loan. But there are other consequences too.
In Australia, there are generally only two Lenders Mortgage Insurers that lenders use. So what happens if your home loan application requires Lenders Mortgage Insurance, and is declined due to failure to disclose debts? It means the insurer that lender uses can decline to insure future applications with other lenders.
So, if after being declined, you go to another lender who uses the same insurer, you can be declined again, just because you were declined before.
With lenders using one of only two Lenders Mortgage Insurers, this can seriously reduce your options.
How should I avoid these problems
The simple answer, is to disclose all your debts. But, it’s not always that simple. Some people don’t realise what counts as a debt to a lender, or they simply forget about a debt.
So, at Bee Finance Savvy, we pay special attention to this area when processing home loan applications. We often ask our clients not only what their debts are, but also for copies of their financial statements. Careful examination of these statements allows us to identify debts our clients are paying off. We can then accurately disclose these debts to a potential lender, avoiding a lot of unnecessary headaches.
If you are looking for a home loan, and want a smooth application process – give our savvy broker Desiree a call or a text on 0455 131 937 or 1300 140 554. Desiree can also be reached at firstname.lastname@example.org . Alternatively, you can fill out the contact us form on this site.
To hear from some our happy customers, we invite you to take a moment to read their reviews on WOMO – https://www.wordofmouth.com.au/reviews/bee-finance-savvy-miranda
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