4 Simple Ways To Improve Your Home Loan Application


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It will come as no surprise to many, that getting a home loan approval isn't as easy as it use to be.

It can feel like there's a never ending list of documentation & information that needs to be provided, lots of running around & even then you may find your application is declined or deferred.

So you have the deposit, a steady income, good credit check, & everything else seems to stack-up,  what else can you do to put yourself in the best possible position for a loan approval?

Understanding how a lender assesses an application will help get you on the front foot.

Most lenders have three key criteria they look at when assessing a home loan application. They look at your character, capability & capital. Generally if you receive an unexpected decline on a loan application (& the income & servicing side stacks up) then there is something they are questioning re: your character.

Character is a broad term used by lenders & is mostly focussed on a potential borrowers financial history & health. Things like your payment history, credit score & relationship with previous debtors. However it also goes a little deeper than this & lenders will consider your job stability, previous applications for credit (which can be seen on your credit check history), the credit facilities you have, & general spending habits - such as regularly withdrawing from your savings account, where your discretionary spending is going, do you budget well & live within your means.

In order to put your best foot forward, here are 4 things you can do that will help a lender feel more secure about lending to you.

1. don't switch jobs

When you apply for a home loan most lenders will require 3-6 months or recent payslips. They will be looking to verify the income you've declared on your application AND they will also be looking to ensure you have a stable employment history. If you've recently shifted jobs this can be a red flag to a lender. Particularly if you're still in a probationary period, or appear to have frequent career changes - this can bee seen is 'risky' to a lender. Having secure employment history is always preferred, however if changes in job were unavoidable, then make sure there is a clear explanation for lenders.  

2.one application at a time

Lenders can be wary if they see you've applied with multiple lenders at the same time. In the worse case scenario they will assume you've been declined by the other lenders. It can heighten their scrutiny of your application, shifting their focus to reasons to decline, rather than reasons to approve. And having many lenders listed on your credit check in a short period of time, isn't reassuring to a potential lender.

3. get a pre-approval

A pre-approval is good peace of mind for you when looking to purchase a house. It lets you know how much you can afford, & is looked on favourably when negotiating for a home. But most importantly it shows your lender you're organised & serious about buying a house in the near future, & as long as you meet the conditions of the pre-approval, the approval process should be smooth.

4. speak to a mortgage broker

A good mortgage broker can be your saviour when looking for a home loan approval. They are there to work for you, keeping your best interest at heart & have the expertise & negotiation skills to get you the best home loan offer possible.

They have the knowledge as to which banks are best to approach given your situation & circumstances. And will put together a loan application that reassures a lender that you are reliable & capable of meeting any & all financial obligations when your loan is approved.


If you're looking for free assistance with your home loan application reach out to one of the Focus team 0800 334 338, info@ffgl.co.nz we'd love to help you out. 

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