Aside from housing and income, there are other common errors that lead to limited results or immediate declines. If we can catch the errors before submitting the application, your options, and chances of approval, are increased. Preventing errors the first time can also save you time & headaches during the application process.
When entering your income, there are two things to keep in mind.
First, if you receive income from multiple sources, only list your highest-earning income. Lenders will accept your highest income source when assessing your eligibility for a loan. For example, if you receive a Disability Pension, but also work part-time, list whichever source provides you more.
Second, when entering your income, use the income you receive before any deductions (taxes, etc).
Lastly, always double check the income amount you have entered prior to submitting an application to a lender.
The Importance of Double Checking
Unfortunately, far too often I see people who simply listed their income incorrectly. For example, the applicant is making $93,000 a year, but list $9,300 as their income by mistake. This will severely limit the number of lender options available to them as many lenders have an income requirement higher than what they have listed.
On the other side, I’ve seen customers who have incorrectly increased their income. For example, someone on Social Assistance whose annual income is $13,400 accidentally listing their income as $130,400. That extra zero will now produce loan options with lenders who aren’t actually going to approve them in the end. However, this mistake may not be caught until after the credit check has been run. A hit against their credit that can be harmful, and could have been avoided.
I’ve also seen applicants enter “Full-Time Employment” and then list $10,000 income; this just isn’t realistic.
Take Your Time
There are many more examples I could provide of errors I see on applications daily, so my biggest tip is slow down! Take your time with your application, don’t rush through the fields and risk a mistake. Always double check everything you’ve entered is correct and without accidental errors or mistypes. Once you are certain everything is accurate, submit your application. Taking a little extra time upfront could save you stressful declines or unnecessary credit checks. The more accurate the information you provide to our system, the more accurate results we can provide.
Other Application Mistakes
While income source is a big mistakes I see, it’s not the only one. Continue reading how other areas of your application could also be restricting your approvals, and/or rates.
- Housing Choices – Read part 1 of my series now and why your housing choice could make or break your application
- Income – Read part 2 of my series now and why your income source is important
- Loan types – Read part 4 of my series around why loan types may not be as interchangeable as you may think