Here’s the issue: Online borrowing calculators and other bank “lead -generation tactics” can grossly mislead ALL borrowers of any experience level.
They are a dangerously shallow way of evaluating your borrowing capacity and DO NOT consider your overall borrowing situation.
They miss MOST of the major factors banks consider for credit assessment purposes.
Actual income (not what you think it might be), income type such as bonuses and allowances, income consistency, family unit, living expenses, true purpose of the loan, property type, unique situations, efficient debt structuring, actual repayments, credit scores, unsecured debts, HECS, child support, family tax benefits, borrowing entity etc, etc, etc.
We’re just scratching the surface. None of these are considered…
They are a marketing tool on which banks spend untold millions to suck you in – with no detailed interview to reveal the nuances of your scenario.
- You must exercise extreme caution BEFORE you make an application directly with ANY bank.
- Do not move a muscle until you have fully offloaded your situation onto the notepad or computer of an expert Professional Mortgage Broker who can analyse your situation deeply BEFORE you get another enquiry on your credit report.
- Getting into the bank “marketing funnel”, trusting them to act in your best interest without the necessary up front, sub-surface checks can result in a painful and debilitating decline.
Want a real-life example of just one of those factors resulting in months of agony and lost opportunity?
Lenders are relying more heavily on 3rd party credit scoring in two ways: Comprehensive Credit Score and Veda Score.
Who cares? You should. Any Zip Pay, AfterPay, latitude, Harvey Norman, store card thingy used to buy anything is recorded in the Veda Score.
One too many of these applications – that’s right, applications, NOT accounts – and BAM!! – you’ll get a decline or you must try to withdraw the application.
Either way, you have another enquiry or mark on your credit score.
It takes just one too many enquiries on the score to have a fatal impact and to fall short of the minimum point requirements for some lenders. It could be just 4 points out of 1200 too few and you miss out.
You have wasted your time making the application, and to add insult to injury, you’ve just got another blemish on your credit score.
Talk about double whammy.
A significant percentage of direct-to-bank applications are declined every single day for any of the many reasons. It’s something us Mortgage Brokers chuckle about when talking with each other about online or so-called digital lenders. It’s a sad merry-go-round involving a failed application only to come to get the advice and assistance of a Mortgage Broker after a declined application.
Now you have to make another excuse to the bank on the next application.
All of a sudden a high-earning family on $300,000+ with a satisfactory Equifax Credit Score now has a poor Veda score and what now?
Your choices become more limited, the cost of borrowing increases.
What should have been a relatively straightforward process is now a real pain in the arse.
Four months of your precious time might get flushed down the toilet while the property market runs away from you.
You might have to sit out of the property market indefinitely.
You might miss out on your dream home.
“Bullshit!” you say… Not so fast.
Just last month, a young high earning ($350,000+) couple had a two-month delay, missed out on the property they had their heart set on and stressed themselves out – all because they had made one too many credit applications.
They were trying to do it themselves…
They thought – wrongly – that being high-earners in steady jobs would guarantee they would get the money lent to them no questions.
Ummm, sorry… not these days…
They got sucked into making an application directly through a big bank one Sunday.
Why would you try to do it yourself?
There is a reason why the use of Mortgage Brokers continues to increase. We play a crucial role in responsible money lending and overall enjoy a terrific reputation. One that I am very proud to be a contributor to.
Direct-to-bank borrowers are at a distinct and serious disadvantage to those who take advantage of the trustworthy and impartial advice most brokers offer.
Here it is in plain English: Find the Best Mortgage Broker – get them to do all the (highly skilled and sometimes painful) work for you.
Oh, and if you don’t haven’t chosen a Professional Mortgage Broker in Fremantle yet, you’re in luck: we’re one of the most highly rated and reviewed Mortgage Brokers in WA with more than 100 5-Star Google Reviews Here’s a link to check ’em out.
Don’t Make a “Big Bank Mistake”…
You’ll thank me later.
Professional Mortgage Broker