Nothing is simple in the world of finance and banking – when applying for a home loan, there is a very delicate balance between giving the bank too much information and not enough!
Giving too much information to the lender can cause all sorts of chaos – an otherwise straightforward application can be severely delayed, and even declined with information the lender never even asked for or needed to begin with!
Not giving the bank enough information can make it hard for them to assess your home loan application and cause delays and stress.
A great example is bank statements – if a lender asked for three months of bank statements – DO NOT GIVE THEM A SINGLE DAY MORE THAN THIS! Why? What if they see something from four months ago that they just don’t like? For example, ‘pay day loans’ – Banks really do not like these types of loan – it suggests that you may be unable to manage money effectively and that you are living tightly from pay check to pay check – so what may have been an easy application is now declined – even though it was a once off loan you took out to buy a wedding gift or birthday present that you paid off four months ago.
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If the bank asks for one payslip – why give them two? You might think you’re presenting a stronger application – if only it were that simple! The lender will pick apart everything listed on your extra payslip. On the off chance you took some unpaid leave, had some changes recently, or just a one off variance on your payslip – the bank is now going to be asking questions to understand what the variance is.
With any luck a letter from your employer will cover this off, but now you’re wasting valuable time on something that shouldn’t even have been an issue – and what if you can’t satisfy the banks curiosity?
The less documentation a lender has to review, and the less they have to pick up and review an application again and again, the less chance there is for the assessor to pick holes in an application – or, ask more questions. Ensure that all the relevant information on the lender checklist is provided up front, nothing more, nothing less – unless there is a considerable reason, keep it simple.
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