Home loan declined - what to do next

Home loan declined – what to do next?

Getting a home loan declined is definitely not good news to have. But rejection, in this case, doesn’t mean the end of the journey! There are several things you can do to get it sorted, and this is what we explore below.

First of all, it is crucial to understand why your home loan has been declined before looking for what to do next. Let’s dig deeper into in:

Reasons for home loan declined

There are a few reasons why a bank would decline your home loan. Here are the most common ones:

Bank Policy

Understand the Bank Policy is critical to avoid a loan declined. Rules vary from one bank to another, but to give you some examples, some institutions don’t accept specific types of visas, while others can deny your loan because your deposit is too low. 

High-density area

The second reason can be linked to the property itself. You might have had a pre-approval and found the right property. However, depending on the area where that property is located, the bank might not go ahead with the loan once it is a high-density area, which means the bank has already approved a high number of loans for that same region.

Bad credit history

Lenders will check your credit score before approving your loan, so if you have a bad credit history, a non-paid debit, or if you don’t provide some important information, they are more likely to reject you.

Low deposit

Before applying for a home loan, it is essential to check if you qualify for what we call a loan-to-value ratio, meaning you have to meet the minimum amount of deposit this bank requires. Ignoring this rule or simply not having the minimum deposit can also be a declining factor. 

My home loan was declined – What to do next?

Once you understand the reason behind your home loan denial, the next step is to check which other institution would allow you to apply for a new home loan and, most likely, get it approved. 

This step can be overwhelming and hard to deal with if you don’t have enough experience. And this is why we always recommend you talk to a mortgage broker to guide you in this process.

At Capta Financial, we help you not only to find the right lender but also to design some strategies to enhance your credibility and improve your chances of getting a new home loan approved.

Scroll to Top
Scroll to Top