Page 51 - Smart Money

Smart Money

Remember, it is not just the bank that is approving your application; it
is also the mortgage insurer in some instances. If your application falls
into mortgage insurance territory, the bank is going to scrutinise the
application more than if it doesn’t require mortgage insurance.
If you need a mortgage-insured loan, you definitely need to submit your
loan application to the bank before you go shopping. You might be unaware
of a default on your file, and think it is all good. But by submitting the
loan application, that will be picked up, and could knock it on the head
straight away.

One of the biggest mistakes we see people make when saving for a home is
putting money into a parent’s bank account. That is a big no-no. Another is
changing your current employment, even when you have a pre-approval.
Let’s say you are currently working full time with a recruitment agency,
and your employer decides to change you to casual. That can affect your
application.
You might put in an offer on a house before speaking to us and you then
find that you can’t afford that house, or may not have enough deposit to
buy that house; that is another mistake, as is accidently letting your credit
card go into default. That comes up a lot.

You might be saving your money and doing really well, putting money
in regularly, but then you take it back out, which just resets that whole
three months of genuine savings. You could have a tax debt to pay; that
sometimes knocks it on the head.

People tend to lend other people money out of their savings, and
when they get it back, it is no longer classed as genuine savings. They
also sometimes check their borrowing capacity using the bank’s online
calculator and think they are right to go. Then they put in an offer, and
unfortunately, we have to tell them that they can’t actually borrow that
much money. They trust the bank’s online calculator, or they trust what
a friend says about buying a property, and they assume they are right.
Maybe they think they can borrow 100% of the purchase price, so they
put an offer in, and then they come to us and we tell them that there are

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