Having a home loan application turned down happens to thousands of people every year. But if it happens to you, don’t be discouraged.
In a recent study, we asked over 1,100 Aussies what they are most concerned about when it comes to the mortgage process and nearly third of Australian borrowers are worried about getting declined by their bank for a home loan1. The good news is that if that happens, there are real life alternatives. At Pepper Money, we recognise that everyone's circumstances are different and we don't believe in a one-size fits all approach to your loan applications. If the banks do turn you down you should talk to us, Here's why:
Major banks’ home loan processes
A rejected loan by a traditional lender may be a reflection of the lender’s current credit policy, which loosens or tightens based on current market conditions and their risk management processes.
This means as a borrower you may have had no issues getting a loan from a bank in better economic times, but you might be rejected today because it’s a tougher financial climate.
At such times it’s worth talking to us at Pepper Money because we might well have products that can suit your needs that the major banks don’t offer.
The other big reason for an application being turned down can be your credit history. Major banks and other traditional lenders use an automated credit scoring process, which means your application might be declined simply because a computer gives your application a score based on your credit history.
In a recent study, we asked over 1,100 Aussies what they are most concerned about when it comes to the mortgage process and nearly a third of Australians borrowers are worried about getting declined by their bank for a home loan1.
Non-bank home loan processes
While it can be disheartening to have been declined a home loan due to your credit history, there is light at the end of the tunnel. Because non-bank lenders, like Pepper Money, can offer you a different approach to your home loan application.
Why would a bank decline your mortgage application? Perhaps you don't have up to date tax returns, because you’re self-employed. Or perhaps because you’ve filed for bankruptcy in the past? Two quite different sets of circumstances that may not fit a traditional lender’s loan suitability and credit assessment criteria. But with some non-bank lenders, like us at Pepper Money, your application is assessed individually by an underwriter against our loan suitability and credit assessment criteria that looks at your overall credit situation. So each application is assessed on its individual merits, by a person, not simply judged against an overarching credit score by a computer.
This means that when it comes to home loan applications, if you have defaults or judgements against your name, we can still consider your application and you may still be eligible for a Pepper Home Loan that suits your needs, provided we are satisfied that your application complies with our normal credit assessment and loan suitability criteria. We are more concerned with assessing why the defaults and judgements occurred, your current means of income, your ongoing ability to repay the loan without incurring financial hardship, where the property is located and the size of your deposit. We assess a range of factors so that we can determine your requirements and objectives for the finance. Approval will be determined based on our lending policy.
Did you know? 3.6 million Australians have been declined a loan by a financial institution.
Many borrowers feel overwhelmed once they’ve been declined and then wait years until they pluck up the courage to apply again. But you don't need to wait for a bank to lend to you.
We’re here to help
At Pepper Money, we believe everyone has the right to achieve their financial goals and we make it our mission to offer other avenues that traditional lenders may not offer. So speak to us today on 13 73 77 or enquire online about how we may be able to help when the major banks say ‘no’ to your loan application.
1. RFi Group Australian Mortgage Council
This article provides you with factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. Neither Pepper nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in this article. For information about whether a Pepper loan may be suitable for you, call Pepper on 13 73 77 or speak to an accredited Pepper Money broker.
All applications are subject to the credit provider’s credit assessment and loan eligibility criteria. Terms, conditions, fees and charges apply. Information provided is factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser.
©Pepper Money Limited ABN 55 094 317 665; AFSL 286655; Australian Credit Licence 286655 (“Pepper”). All rights reserved. Pepper is the servicer of home loans provided by Pepper Finance Corporation Limited ABN 51 094 317 647. Pepper Asset Finance Pty Limited ACN 165 183 317 Australian Credit Licence 458899 is the credit provider for asset finance loans.