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With rates likely to rise and the increasing pressure on the cost of living, here are some areas you need to review to stay on top of your finances and help you get your loan approval across the line:

NOT ENOUGH OF A DEPOSIT

When applying for the home loan, your deposit does not meet the lender’s loan-to-value (LVR) ratio requirement. The standard LVR requirement is 80%, so most lenders prefer a 20% deposit or more.

INSUFFICIENT INCOME

After assessing your income in relation to your day-to-day costs and debts, the lender comes to the decision that you are not financially capable to meet home loan repayments.

CREDIT REPORT DEFAULT

A credit default is when you have overdue payments on your credit card for 60 days or more. A credit provider is able to file a late payment to a credit reporting body after a 14 day ‘grace period’.

POOR CREDIT HISTORY

The lender will use your credit rating as a deciding factor on whether to approve or reject your home loan application. Get a credit report prior to applying for a home loan so you take the necessary steps needed to improve your rating.

TOO MUCH DEBT

You will need to provide any debts you have to your name when applying for a loan. The lender will look at how much of your income is used to repay any debts. Your home loan might be rejected if the debt-to-income ratio is too high.

LACK OF SAVINGS HISTORY

You need to provide a genuine record of savings for at least three months. It also demonstrates that you have a reliable and stable income.

INFORMATION IS NOT CORRECT

All information that you will need to provide in a timely manner including bank statements, employment details and contact information need to be accurate. The slightest misspelling can lead to your home loan application being rejected.