Imagine you’ve finally got to loan interview stage, know what you need to bring, and think you’re all set to be approved for a home loan. So what could go wrong?

We asked our lending consultants the three most common reasons loans are declined at interview stage, so you know what to watch out for.
 
Credit crunching
It’s vital that you let your loan consultant know the absolute truth about all the loans, store cards, credit cards and everything else you could still owe.

Common ‘missed’ credit includes:
- Forgetting to mention something you’re still paying off, like a Studio 2000 photography account.
- Not realising that a credit card which you never use will still have an impact on what you can borrow.
- Assuming old bills you forgot to pay wouldn’t be on your credit record any more.
 
Whatever the reason, having impaired credit can significantly reduce the amount you can borrow to buy a home, and in some cases could mean you can’t secure a loan at all.

Your best bet is to be totally upfront about every credit card you have, along with everything that you’re paying off, have on credit, haven’t paid or still owe. It will save lots of time in the long run.
 
Savings stumbling
Our loan consultants find it’s very common for people to over-estimate how much money they’ll have to contribute upfront. Most people are keen to get started as soon as they can, and might be tempted to go ahead to a loan interview thinking they can get the money together somehow - but this is generally not the best approach.
 
Once you find out how much you’ll need to cover fees, charges and deposit, be realistic about how soon you can get this amount together. Don’t count on vague promises from friends to loan you the money, or assume family members will be able to make a contribution.
 
If you need to save to reach that target amount, it could have the added benefit of counting as evidence of genuine savings - another thing people often overlook in the race to get approved for a loan.
 
Income incoherence
Another very common hiccup is overstating income. It’s easy to boost up what you think you earn when you’re getting an assessment over the phone, but you will have to prove your income - and not every type of income counts. For example, you may have included overtime or bonuses as part of your income, but these don’t always count. It’s also very important to have been employed for long enough, including any probationary periods, as this is one of the most important eligibility criteria.

If you’re not sure, ask your loan consultant upfront.Homestart