Aaron Whybrow explains why getting a car loan or other credit before your home loan settles can kill your approval. Lenders reassess your finances right up to settlement, and major new debt or job loss can tank the deal. Tell your broker first.
Has your financial circumstances changed after the home loan application has been approved? Hey, it's Aaron from Diagnostics and Finance and I just. This is a quite sensitive topic at times because most people would think that the home loan's been approved and it's all locked in place and there's no problems that can go wrong. Well, I just want to give you a couple of little tips on this one. Explain the problem, a couple of tips. One of the problems is that if your circumstances change from for example, made redundant, which is really worst case scenario, now you don't have a job and now I need to reservice the loan and you're a main breadwinner. That can pose a big problem even after the home loan application has been approved. One of the things that happens is that once the home loans application has been approved and you talk to me, I am obligated to tell the bank and I think it's a logical way to do it because I don't want to put you into debt that you are going to be stressed about going forward. Now losing job is a circumstantial thing, but that's probably the worst case. So when circumstances change and one of the other circumstances could be that your car blows up and you need to get a car loan to do that. Now reservicing a car loan versus lower levels of income may not have any problems to your home loan application and just a little bit of a tick box and a disclosure to the bank will just tick that off and they can keep going to settlement. But be very careful if you're thinking of changing your car or you've got circumstances that you can control, it's not a good idea to go for those applications for credit during the period of time that you are going to get to settlement. Now even after settlement, I would look to get myself involved as a broker or your broker involved to be able to go through the numbers to make sure that it's still in your best interest to go buy that car, to apply for the interest, refinance, whatever it is that you need to be able to live and survive and make some money in this world. Just be very, very careful during the home loan application and post the home loan application because you've got to afford now the mortgage that you have or even the investment property mortgage you have on top of your current one. So just keep your broker in touch with what's going on with circumstances. We know that life happens and nothing really will phase whatever you tell me so that we can get this in place. Big, big things change. Life happens. And the ability to make money with a car, sometimes it just needs to happen to get a. To get a car loan. Sometimes it doesn't. So just keep that in mind. Have a great rest of the day.
