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ISCOVER
Staff Reporter
Submitting a home loan application to more than one bank, or repeatedly to the same bank, is risky business.
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“Borrowers today only have one opportunity to get it right,” said mortgage broker Grant Rheuben.
Mr Rheuben said consumers who file multiple mortgage applications could damage their credit history and could miss out on a home loan.
“In a world where computers are processing home loan applications, a borrower with two or more credit enquiries may be declined due to a poor credit score,” he said.
“Each loan application creates a credit inquiry on the borrower’s credit file. In instances where mortgage insurance is payable, the bank and mortgage insurer can create two inquiries for the same application.”
Mr Rheuben experienced the misunderstanding himself with a bank.
One of his clients recently purchased a property after previously having a home loan application declined.
“My client had his loan application processed by another mortgage broker and then following a slow process went directly to the same bank and due to variations to the initial application a total of eight credit inquiries were created for the one application,” he said.
“When this application was submitted to a new bank the loan was declined due to the number of credit inquiries.
“But when the bank was advised about what had actually happened the number of credit inquiries was reduced from eight to two, which then allowed the application to move forward.”
