When you are in a tight spot, economically speaking, getting a loan by speaking to your local bank manager with regards to helping you through the tough times can be one way of handling your affairs. This way you might be able to supplement your income until your financial situation improves, or perhaps you need to take out a second mortgage on the house to make sure that you can cover medical bills or otherwise. No matter what the situation, you will naturally be wanting the best rates and the best terms.

However, there is a growing tendency for the banks to reject loans for mortgages due in no small part to stricter regulations since the 2009 crash for instance. And although the great financial crisis has long been over and is no longer lurking in the shadows, the banks have learned their lesson and some have even been put under special restrictions, in terms of what they can and cannot do. This means that the requirements for people who will lend money have been sharpened considerably in the past years. But there are things that can be done to reduce the risk of a getting your loan application rejected.

Before you even go to the bank and talk about a mortgage, consider looking online at a mortgage calculator, to see what you can expect and make sure to keep your documents up to date, even the budget as we will now discuss in more detail.

Document your budget

The most important factor when it comes to borrowing money in the bank is the fact that you have control of your finances at home. Make sure that things are looking tidy and responsible, and that your household budget is thoroughly documented. Record all revenue, expenses and debts so that the bank can get a quick overview and see whether your finances can cope with the load that a loan puts on it.

Secure the loan

When the bank needs to lend you money, they will always make a measurement to give them an idea of the risk. This is for the bank to be sure that they will get their money back again, one way or another. The risk measurement is made from an assessment of your credit rating, your commitment to the bank and what you own. Bad payers, debt collection cases and that sort of thing are causing banks to become anxious. It goes without saying that the bank would like to have as few problems with outstanding payments as possible.


Therefore, the bank may ask you to provide some security or collateral for the loan that you are trying to record. One example could be that you are taking out a mortgage on your property to help pay inheritance tax, and quickly repay the debt once the inheritance has been sold off, but there are many reasons and ways to provide security. Of course, with this method, you need to own your own home, or some other assets that the bank deem worthy.


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