How your transaction history could impact the home loan application

How your transaction history could impact the home loan application

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Our transaction history is important to understand as lenders use it to determine monthly expenses and the nature of such expenses. Whether it be day to day purchases, payments for
subscriptions or even our questionable transactions. Having recently assisted a client, first home buyer who had limited experience in the process, the importance of this history was
highlighted.

When you’re applying for a home loan, you’ll need to provide a number of documents to your lender. This client was a first home buyer, who needed to show three months of genuine
savings and transaction history. He didn’t know the impact that a number of his transactions could have on his ability to borrow money. He played online poker, which is nothing out of the ordinary for most people. However, lenders will question such transactions, for a number of reasons. Firstly, they want to ensure that their new customer will not be adversely affected after taking on a mortgage. Secondly, it’s a matter of responsible lending and the risks associated with lending to someone with gambling transactions.

In this situation, the client was not approved and desperately needed a solution. He would lose the deposit and settlement was due in less than a month. So, the alternative was to look into
other options such as a non- prime lender that can accommodate to the situation and is more lenient. It also means a higher interest rate and associated costs. At the same time, a bank
statement was required showing the amount of savings available to finalise the purchase. The outcome was an approval which resulted in a settlement. However, the next time you transact,
just remember it will form part of your history.

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Harry Kakavand