With numerous lenders offering cash back to entice new business, time to approval from application has blown out to over 30 days with some lenders.

That’s a long time to wait to hear if your loan is approved when you have signed a purchase contract with 14 day finance clause!

If you aren’t applying through loansHub and want to find out quickly if you are outside of an institution’s lending criteria, ask these two questions, it will help you figure out if the lender will approve your loan or if you’re just wasting time jumping through hoops when you could have used another lender.

1. What type of properties will you not finance?

You need to check if your preferred lender is willing to accept property that you own as security or would like to buy.

Some borrowers are surprisingly clueless about this and only advise the lender, they applied for pre-approval with, what type of property they want to buy after they have made an offer on it.

This is only going to hurt you because, if the institution doesn’t lend against your type of property, you are wasting your time.

Typically, lenders are less likely to lend against properties that they think will be hard to resell.

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Some examples of properties perceived as risky include homes built near high-voltage power lines, homes near a petrol station, homes on acreage with no access to town utilities, and homes built in remote areas or on dirt roads.

Many lenders will also rule out or restrict high-rise apartments, especially in areas with a lot of development. If you own or plan to buy one of these types of property, your first objective is to find a lender who lends against those properties.

2. What are your rules on serviceability?

A lender needs to be confident that you can service your loan, especially in this era of heightened concern about responsible lending.

Even if you earn more than you spend, from a lender’s perspective your ability to repay also depends on the reliability of your income plus the lifestyle you live.

Some prospective borrowers are caught out because they think that all income is equal, but that isn’t true for a lender.

The most reliable type of income is wages from a full-time job that you have held for an extended period.

Many casual employees who work full-time hours consider themselves – quite reasonably – to be in full-time employment, but to a lender it may not be considered the same because their hours could easily be cut back, making it difficult to service the loan.

If you are in this situation, it is important to find out your lender’s policy early in the discussion so you aren’t disappointed later.

Also, be sure to ask the lender’s policy on length of time in the job. Don’t quit your job to move to a new employer during the application process.

Unless your new employer is willing to waive probationary period, this will most likely prevent you from getting final approval because they have no longer been in their current job for an extended period.

By asking these questions upfront, you should avoid the most common pitfalls that trip up borrowers.

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This article via Smart Property Investment does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.