Every day countless people have their home loan applications rejected from Banks, despite being able to provide a 20 or 30% deposit and easily meet the required mortgage payments. You may have even experienced this. If you earn commission from sales, have overseas income or simply don’t have the correct financial documents available for Banks, they will knock back your home loan application. Having multiple sources of income can be a great financial move, but it can be difficult when it comes to getting a home loan. Thankfully, you have an alternative option to get financing.
Why did the bank reject your loan application?
Despite having the sufficient deposit an income stream, a Bank will still reject your home loan application if you don’t have the relevant or ‘right’ documentation. You could be earning commission from sales, overseas income or simply not have financial documents available, and in doing that you may earn far more than an office worker. But it doesn’t matter how much you earn, it matters where it comes from – according to Banks.
For example, you may be an independent real estate agent – you earn high commissions but not a regular salary. In addition, you could have invested in the sharemarket of a developing economy, such as China and be receiving dividends. Further still, you may be working as a bartender at nights. If you did all that, you could be earning well over $150,000 a year. Yet, you wouldn’t have the right paperwork, so the Banks would not provide you with a home loan. Thankfully, there are other options that are available at many income levels.
How else can you get a loan?
While the Banks care where your income comes from, alternate sources of finance such as mortgage brokers can understand that it is how much you earn – not where it comes from – that matters. In fact, there is a specific type of loan for people who, as a result of having multiple sources of income, don’t have what Banks call the ‘right’ document. They’re called Lo Doc home loans.
What are lo doc home loans?
Lo Doc home loans are just that – low documentation home loans. With a low doc loan, you don’t have to prove your finances. While they used to be available from the Banks, they are not providing people with lo doc home loans like they used to. Thankfully, they’re still available. iLender make low doc home loans available – and we will continue doing so. We understand that not having the financial records doesn’t mean you don’t have the income to meet mortgage repayments. Responsible lending means you still have to show bank statements and the ability to pay but you don’t have to show Financial Accounts which is what all the Banks require.
Your opportunities
If the Bank has rejected your home loan application because you didn’t have their required documents, you don’t have to miss out on the capital gains available in the housing market. There are houses available throughout Auckland, Wellington, Hamilton and Tauranga that are an excellent entry point to the financial market, which will begin your journey up the property ladder.
