This article is different to HLG022 as it addresses what to do if a mortgage application is rejected by a lender – which, due to stricter banking regulations, is becoming more common.
Tired of paying rent to a lazy landlord and watching your friends become homeowners, you crunch the numbers and figure out you can get a home loan at an interest rate of around 3.7% per annum.
After sifting through the auction results and doing your sums you calculate that you’ll need a loan of $400,000 to buy a desirable property with an acceptable commuting distance to work. You plug the numbers into the MoneySmart mortgage calculator and it tells you that, including fees, your repayments will be $2,056 per month for the next 25 years. You’ve worked out your monthly budget and, yes, you can manage those repayments and still have a bit left over.
Now you have your eye on a home within your price range. You apply to your bank to borrow $400,000, but when the answer comes back it’s “no”.
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