1. Substandard Credit Score

Banks check your financial history through the Credit Bureau. A history of late payments or defaults can lead to loan rejection.

Traps:

• Overdue credit card payments or loans
• Past history of debt-related lawsuits

Tips:

• Check your own credit bureau report before applying for a loan.
• Pay off debts on time for at least 6 months before applying.

2. Insufficient or Unstable Income

Banks assess your ability to repay by looking at your Debt-to-Income Ratio (DTI).

Traps:

• Unstable income, such as freelancers without clear bank statements.
• High fixed expenses leaving insufficient income to cover mortgage payments.

Tips:

• Manage expenses and increase supplementary income to maintain a DTI below 40%.
• Keep income statements for at least 6 months.

If your income is irregular, banks might perceive it as a risk! Loan consideration is related to trustworthiness and repayment ability!

3. Excessive Existing Debt

Traps:

• Credit card debt, personal loans, or car loans consume too much of your income.
• Always making minimum payments, causing debt not to decrease.

Tips:

• Pay down old debts as much as possible before applying for a loan.
• Avoid incurring new debt, such as 0% installment purchases or new credit card applications.

4. Incomplete or Unclear Documents

Banks require proof! If you cannot provide clear income verification documents, such as receipts or tax payment records, loan consideration may be delayed or rejected.

Traps:

• Lack of income documents, such as payslips or bank statements.
• Documents lack credibility, such as unorganized income-expense records.

Tips:

• Prepare essential documents such as payslips, 6 months of bank statements, and an income certificate.
• If you lack clear income documents, such as freelancers or small business owners, keeping financial records or filing taxes can significantly build credibility.

5. Insufficient Down Payment

A low down payment leads to a higher loan amount, which may increase risk in the eyes of the bank.

Traps:

• Down payment less than 10% of the home price.
• No reserve funds for additional expenses, such as transfer fees.

Tips:

• Save for a down payment of at least 20% of the home price.
• Prepare reserve funds for other expenses, such as home appraisal fees and mortgage registration fees.

6. Choosing a House Priced Beyond Your Means

Traps:

• The chosen house is priced higher than your borrowing capacity.
• The bank assesses that you cannot afford long-term repayments.

Tips:

• Choose a house with a maximum price not exceeding 30-40 times your monthly income.
• Consider second-hand homes or homes in lower-priced projects.