All Topics / Finance / Does Pre-Approval mean nothing?

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  • Profile photo of GlennStakerGlennStaker
    Member
    @glennstaker
    Join Date: 2005
    Post Count: 23

    My partner recently gained proper pre-approval from ING about a month ago (through Aussie Home Loans) to borrow up to 270k for her first property. We had written confirmation of this. She found a unit for 230k (well below approved amount) and put in a contract….after around 18 days ING then rejected the application. Something to do with mortgage insurance.

    Here we were thinking we're totally set since she had pre approval and had met all of the genuine saving criteria etc etc (3 long boring months of genuine savings) only to be REJECTED! What's the bloody point of pre approval huh?

    Is this normal? Not sure if i should be angry at ING, Aussie or take the Ben Cousins approach "SUCH IS LIFE".

    Can someone educate me because i'm not understanding! :)

    confused
    glenn

    Profile photo of hydramaxhydramax
    Participant
    @hydramax
    Join Date: 2009
    Post Count: 47

    65ens
    It may have had something to do with the postcode. It may help to check what LVR your'e allowed in that particular postcode.

    Hydra

    Profile photo of crjcrj
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    @crj
    Join Date: 2004
    Post Count: 618

    Would the $270K have been on the basis of 80% LVR?  ie they would have lent $270 on a property bought for $350 ie no LMI required

    Profile photo of maree_bradrossmaree_bradross
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    @maree_bradross
    Join Date: 2007
    Post Count: 401

    We couldn't get a loan through ING because of mortgage insurance and my husband not being in his current trade for 2 years (this is his third trade qualie and has never been unemployed). However our lovely broker (thanks Richard) insisted we go through a top 4 bank and we got the loan. Apparently the top 4 have bigger clout over the mortgage insurer.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Thanks maree.

    Sometimes it its the pressure your Broker puts on the lender as much as anything else.
    With some of the larger lenders they have an open LMI policy in that if the lender accepts the deal the mortgage insurer will follow suit.

    Glenn could also be a change of ING policy as that happens almost every day these days with lenders tinkering with what they will and wont accept.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of never too latenever too late
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    @never-too-late
    Join Date: 2009
    Post Count: 18

    Simmilar thing happened to me with my first (and so far only) home loan application with the NAB. I applied for a HL prior to finding a property. They told me how much they would lend me with my deposit. I asked for a pre approval certificate whih they gave me to make me happy . I was a casual cleaner and sole parent incomer with a aged pensioner mother living with me . I then went ahead found a property paid 10% deposit which was a lot of money for me $14,500. The loan was in my name soley but they did take into account my mothers pension as income into the equasion. My mother then went and died on me rather suddenly  so they reneged on my loan approval. I wasbound to purchase that property or stand to lose my deposit. I was devestated. I appealed, pleaded and cried and the decission went to city head office which eventually went in my favour. They made it very hard for me though,  instead of  what was to be a 25 yr term and smaller repayments they then shortened it to 12 yrs and double the original repayments.Taking into account my two childrens ages and how long I would be on a guarenteed pension income.  I am still plugging away at it on my own but work full time now and now only have 4 yrs to go ye he. So maybe you can appeal it . It worked for me. Good luck.       (changed circumstances was their defense)

    Profile photo of GlennStakerGlennStaker
    Member
    @glennstaker
    Join Date: 2005
    Post Count: 23

    whatever the case it's terrible for their reputation…..we basically blame ING for what looks like us losing the contract. We had 28 days for finance on a 30 day contract….after we originally had 14 we got an extension because they were taking so long. They told us after 18 days that it was a no go so we've had 10 days to try to get finance through someone else….finance date is now next wednesday and our broker has still not gotten back to us…cant see how we'll be getting approval and then a valuation etc prior to wednesday. So we're basically resigned to losing this contract…..the seller has already indicated that we won't be getting another extension.

    Profile photo of kum yin laukum yin lau
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    @kum-yin-lau
    Join Date: 2006
    Post Count: 342

    Hi, never too late, you're to be congratulated for getting through the tough job of getting the house. Good luck on your future endeavours.

    KY

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