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Lenders have a specific credit policy they use to assess and approve loan applications.
A lender’s credit policy is a document that outlines the requirements and procedures for approving a loan and normally considers the following factors:
Borrower criteria
Residency status
Guarantors
Savings requirements – both genuine and non-genuine
Employment and income
Expenses and liabilities
Property and security
Loan to valuation ratio
Lenders mortgage insurance
Maximum loan amounts
Loan purpose; and
Interest only loans
Every lender has a different credit policy and the different documents a lender will ask for is set out in the lender’s credit policy. If your situation falls outside of the lender’s policy, it is likely that the application may be declined.
A lender’s approval or denial decision and the criteria they base their decision upon may vary significantly from one lender to another, which explains why a loan application may be approved by some lenders but not others.
As your mortgage broker is accredited with a range of lenders, they are required to have knowledge of lender credit policies. Having this knowledge and access to a range of lenders gives your mortgage broker the ability to ensure they provide you with the outcome that meets your requirements and objectives.
Speak to your mortgage broker today about lender credit policies.
Kind Regards, The Newstead Group Team