As a potential applicant you’ll most likely understand that there are only two ways that your mortgage application can go. If everything is in order and you’ve made a point of properly preparing your documentation (and possibly hired the services of a broker), then there should be no reason why you wouldn’t be approved.
But how about those of you that might have to face a rejection, either through something that you’ve failed to do properly; or through no fault of your own?
If you don’t tick all of the right boxes, you could soon find your application being rejected by your lender – and as if that wasn’t bad enough, this might have other unprecedented consequences. Before panicking, it is important to note that these consequences can be rectified – with some being more serious than others.
That’s actually one of the main reasons why we encourage hiring our services; simply due to the fact that those that take on mortgage brokers are several times more likely to be approved for a loan. But for those that may still be a little sceptical, here’s a little further information relating to how detrimental a rejected application can be to your future financial endeavours.
Your credit score
Whenever a bank considers an application, they will undertake a variety of checks to ensure that you (as the potential borrower) are a viable candidate for approval. If you aren’t and you face a rejection as a result, then this will actually be marked on your credit score. This might not mean anything right now, but considering that the next time you apply for a loan your lender will review your credit report – your borrowing efforts could soon start to unravel very quickly.
Your ability to borrow from the same lender
If a bank rejects your application, then they will undoubtedly feel that they’ve done so for good reason. So, what will this mean if you intend to approach them again for a mortgage, or for another type of loan? Well, in simple terms, the chances of them considering your application a second or third time will be particularly slim. You might even find yourself being barred from ever applying again, in severe cases.
What we advise
Rather than leaving your approval (or rejection) to chance, it makes much more sense to take the necessary steps to improve your chances of being approved. You can do this by preparing your financial data, proof of earnings and other obligatory documents – and you could go even further by hiring a broker to correspond directly with lenders on your behalf, fast-tracking your application in the process.