7 things that can derail your mortgage application

Published on December 4th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Paperwork delay

This can seem like it’s not a big deal – they’re just papers, you’ll send them later. Not so fast – required paperwork is important and it can make or break your deal. Sure, if you’re missing some documents, you are likely to still get a loan, but it will be a restrictive one and those entail a lot of conditions. Even worse, you may find your ideal property, only to learn that the lender has received the rest of your documents and is rejecting you on account of something they disliked.

Not considering all options

Everyone knows that you don’t take the first offer, no matter what you are shopping for. The same goes for lenders. First, you have to “shop around” and see what else is out there. Different lenders will offer different amounts and different conditions, and you have to be aware of all of them.

A small deposit

With today’s financial reality, the days of no-deposit home purchases are over. In order to score a home, you need to put down some real money, to the tune of at least 5% of the price of purchase. But expect lenders to ask for even more than that. This may or may not be a problem for you, but if you’re not rich, it probably is. This means that you need to research the market very well and figure out exactly how much you need before making up your mind about purchasing. See what the average deposit is and add 5% to that.

Being unaware of your real options

The most important lesson here is to know what you are really capable of borrowing. That huge, luxurious house may be calling your name, but unless you know for sure you can swing the money to buy it, you’d better keep looking. Making the mistake of setting your heart on a property that is too expensive or worse, making an offer that goes beyond your means can come back to bite you in the ass.

Failing to declare all expenses

It’s important to let your lenders know exactly what your expenses are, including child care and emergency credit cards. Whether you omit them by mistake or on purpose, the lenders will find out, and they can very well reject your application because of this.

Not disclosing missed payments

When you are applying for a mortgage, you cannot afford to have missed payments. Whether you’ve forgotten about them, missed them on purpose, or couldn’t pay them on time, lenders will know. Not only that, but they will reject your application. One default (three months of failure to pay) can derail you for as long as five years on a loan.


To put it simply, you can’t be unemployed and take out a loan to buy a house. It has to be one or the other, unless you have a good amount of money stashed away to pay your mortgage. If you haven’t been receiving income for 12 (or at least 6) months, they will most likely reject you altogether.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for car loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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