Be aware of ‘cheap’ and ‘no frils’ loans

I just wanted to let people know of a pretty bad experience I had recently with a Home Loan company.

I did my research online, and found HomePath to have the cheapest home loan that suited me. I obtained a pre approval for $50K over what I wanted to spend.

About 1 month after getting the pre approval I found a property and made an offer that was accepted. This was $50K under my pre approval.

I assumed (yes, never assume anything) that like most banks, I would notify them of the property, and within 48 hours they would value it and give me a yes/no. Well…..

I told them about the property, and they told me it would take 2 weeks to assess my finances. Only after that would they arange a valuer, that would take upto another week before an answer would be given to me. The property had been on the market for a while and the vendors would not put a ‘subject to finance’ clause in the contract.

When I complained to HomePath about why I bothered getting a pre approval when it obviously wasn’t worth my time. They told me that they always re check finances prior to approving a loan, and they are aware that it may cause delay.

Unfortunately for me, as I would have preferred to take my business elsewhere, they had a good rate so I decided to continue with them.

In a nutshell, we had a 10 week settlement and it wasn’t untill 2 weeks prior to settlement that we were formally told that the loan was approved.

I would advise that you stay away from HomePath unless you can talk your vendors into the ‘subject to finance’ clause to cover yourselves.