Hi y’all -me again.
I posted a while ago saying that after being self employed in WA and moving to Sydney that the bank wants 6 months of work history before giving me a loan.
The 6 months was up about a month ago. I saw my mortgage broker who did the sums and told me I could borrow up to $xxxxxx.00. This included refinancing my current WA property. She told me it was okay to purchase properties to this value but not to go over this amount.
Anyway, when returning to Perth for Easter and knowing where and what I wanted to buy (and how much I had to borrow) I signed up for 2 properties.
After returning to Sydney and over 2 weeks later ringing the broker almost every day, I discover only TODAY that the bank will lend me around $200k LESS than what i was initially told I could borrow! Now I have lost one of the properties and after speaking to another mortgage broker today, I have discovered that the banks would never have lent that LVR due to the mortgage insurers not liking deals over 500k. It was only 86% or so…
Has ANYONE ELSE has this much drama?? What do these banks want? I have a secure job, no personal debts, good payments, high income what else???
Worse comes to worse, I can only refinance my existing property and I will still be able to settle on a nice 2×1 Apartment with parking, 4.5km from the city of Perth on the way to Scarborough Beach. That was 115k BARGAIN if you ask me. Also comes with free tenant!
Hi Devil,
Once you go over 80% you are generally at the mercy of the mortgage insurers – and as you have found out there are times when they do say ‘no’ even if the bank said yes – after all they carry the risk.
Based on your description and your other post I would suggest it is the property you purchased that caused the stress.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Not so much the properties being the cause of the stress, its just that I was told the finance would be “easy” this time. Then the broker couldnt give me a straight answer about what stage they were up to, why it was taking so long, and even the lender we were applying to changed at the very last minute?!?!?! Strange to me. We missed the standard finance approval date as if the deadline date didnt even exist. One property is now 11 days over the finance approval date!
Had two awesome properties purchased at very good prices. Im keeping the bargain one, but if anyone wants an 18 month old, 4×2 house 1km from the beach for 208k let me know ill put you in touch! Really good buy [cap]
Possible defence for your broker – no defence for taking two weeks to communicate to you – once lvr exceeds 80% often (not always as it depends on which bank) your situation will be assessed on the MI’s calculator, not the banks as the MI is wearing the risk – the MI’s calculator is less aggressive and will lend you less than the banks (depending which bank we are talking about).
Other funders will do 90% with no MI – you do pay a premium for this – but if you weigh this against the overall strength of the deal it may actually be cheap.
Hi Devil
The Mortgage Insurers have their own servicibility calculators, so as Derek said, even if you have an approval from the lender, it may still get knocked back by the Mortgage Insurer.
If you’re looking for an 85% lend, what about just dropping it to 80% and avoiding the Mortgage Insurers? May not get you into that particular deal but at least you’re still in the game.
And if you’re not happy with your broker (sounds like an honest mistake on their part) try one of the smart cookies on here.
Good Luck!
Brendon
Acute Mortgage Reductions
http://www.acutemr.com.au
[email protected]Wow, I wouldn’t stick up for the broker.
I have never told a client to go and purchase without a pre-approval. Especially when LMI is involved.
No, that’s a dumb broker in my opinion. If you take the risk and tell a client to purchase then you should wear the blame!
ALWAYS, get a pre-approval from the lenders. Then you have something in writing.
If LMI is involved then the broker should have used the MI calculator. It’s that simple. That is very unprofessional.
Cheers
Stu
Certainly see your point Stu, two sides to a story however – perhaps the other team should be contacted and be invited to defend his/her activities.
Your pre approvals may be different to mine in qld, as i’ve never seen one which has been signed off by the MI – let alone not being conditional on so many items (including CRA, suitable security, valuation, location etc etc) as to be simply not worth the paper they are written on.
Hence many brokers simply don’t waste theirs, the funders or the clients time effecting them.
Basic math of LVR and whether or not MI is applicable would be a no brainer for any reasonably experienced and diligent broker.
I, like you I’m sure, would place emphasis on the ‘reasonably experienced and diligent’ part – perhaps poor communication is the offender here.
Cheers Brahms
I agree with Stu. It is best to get a pre approval in writing before even looking for a property.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
devilcv8,
Horrible situation, but not amazingly uncommon. Even pre-approvals are no guarantee.
I suggest you contact a good mortgage broker (one who deals with a lot of investors) & see if the situation can be saved.
Try Rolf Latham (www.asapfinancial.com.au).
Cheers,
Aceyducey
How many potential borrowers know to ask for an irrevocable letter of offer from the chosen lender?
Most letter of offers from banks come with a disclaimer stating that it’s not an official letter offer for finance, making it not worth the paper it is written on.
The other question here is: Have you unintentionally made any mistakes with the info supplied to the broker? Sometimes an honest little error can get an application knocked back?
Brendon
Acute Mortgage Reductions
http://www.acutemr.com.au
[email protected]Thanks for your replies. No, definately no mistakes with the figures. I have sent a very long email outlining my concerns to her, and am waiting for a response. There is more to the story above where she has contradicted herself saying some things.
Anyways will update when I know more
Luke [cap]
I note other brokers comments about pre-approvals not being water tight. I agree. However, it is better than nothing!
Plus it would have picked up any serviceability issues and helped Luke.
They are still very worth while in my opinion.
Cheers
Stu
Both Pre-Approvals and Conditional Approvals have their place as the process amy disclose issues/problems.
But never ever sign a contract without Full Approval! Very dangerous!
Re the 2 properties, if not already too late, and assuming serviceability, vals etc are OK, then 2 loans (same lender) will work – each loan is shipped off to different MI. Solves the exposure issue.
If your broker knows you’re already committed and isn’t moving heaven and earth to find you a solution fast – change broker immediately!
Otherwise you’re going to lose a deposit – and possibly even damages if the vendor got nasty.
Max Hugen [email protected]
Alpha Financial
Residential & Commercial Loans
http://www.alphafinancial.com.au
02 9560 3061Thats a good suggestion using two different LMI companies! Never thought of that. I need a more proactive broker I think. The situation im in now, is that I have a letter from the lender stating an approval pending valuations but would it be too late to go through the whole process again now?? I dont want to lose the 115k property I bought…
Should I get this one on its way to settlement then contact a new broker to sort out the possibility of getting the finance for another property or will it be too late?? I hate not getting the right advice and finding out that it costs me money to refinance and get out of loans etc..!
I did however find out that one of the mortgage insurers knocked back the application simply because of too many credit file enquiries. I told my broker that was due to the fact I was a sole trader and ran a small business in Perth up until September last year, and, over 4 years I had to lease vehicles, computers, open trade accounts etc… Does anyone know of this being a problem since it WAS mostly for business reasons? I obtained a copy of my CRA File and forwarded it to her to pass on to the LMI company to try again.
*looks for nearest wall to bang head*
Luke
I have now put up a post asking for references for a decent mortgage broker. *fingers etc crossed*
Yes, I have had one of my applications rejected because of too many CRAA enquiries. (Westpac). But it was approved (x2 more) when I explained them.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry – What do you mean by x2 more? Do you mean twice as much as originally offered?
Knowing how TerryW plays (at least on the forums) is, I would say Yes!!!
Rgds.
Lucifer_auPlease dont shoot the mortgage broker,
yep it’s sh..y when this happens,but you must have known that the CRA report was shaky due to all the enquiry’s …why not try to have some of these enquiries taken off the CRA.
Dont ever think just because the lender said yes its a given because the Mortgage Insurance has the last word…if you can’t get a 80% lend next time ask for a lender who doesn’t use mortgage Insurers …or put the loan in a family name , new name new game.also check how long has the broker been in finance.?The big question has this broker got any IP’s of her own, if not use one who does.
regards Maurn[angel]
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