Hi All,
I recently applied for refinancing my full doc loan of 200k.
Value of my IP has increased by approx. 150k and I wanted to extract build up equity on 90% LVR loan.
I have no problems with serviceability, being full time employed on decent salary, with no other debts etc. liabilities.
To my huge surprise, my application for 360k was turned down by QBE LENDERS' MORTGAGE INS LTD on CRAA grounds. They said my credit file was “overactive” !!!As a matter of fact, there are exactly 14 records in my CF spanning last 4 years, all in Consumer Credit section. 7 are for credit cards and 7 for an investment loans (I was shopping around for a good deal). Out of these, I retained 1 credit card and 1 loan. Anyway – it works out less that 4 application per year, which I don’t consider as an excessive amount. Apparently lenders are of a different opinion…
Looks like I hit a submerged rock, huh???
Any ideas how to get around this issue and got my IP refinanced would be highly appreciated,
Anthony
Tell them exactly what you have told us.
LMI can be a bit like that. Try to keep enquiries to a minimum and just try to explain your way out of this one.
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
Hi Anthony
As Terry has mentioned in the current climate LMI can be like that.
QBE PMI are having a run of querying Credit Reports and irrespective of what you say more than likely will not budge.
Get you Broker to put the deal to a lender that uses Gemworth.
Richard Taylor | Australia's leading private lender
Some banks can also be a bit reckless. I had my broker get my credit report and I had a credit check done by NAB twice in two days for the one loan!!!!
Yeah, looks like you hit a rock!
I suspect it's the credit card enquiries, that many enquiries makes it look like someone's shuffling thier debt from one card to another to take advantage of the low interest periods on newly transferred debt. However, knowing this now this doesn't help you out of this particular hole…..
As someone's already mentioned, write to the company and explain all the enquiries, and any cards or loans that you actually took on. Be completely honest with them, if they find out you missed anything, they'll be doubly suspicious! If they don't budge find a finance house that doesn't use that LMI company (my understanding is that there are only two companies offering LMI in Australia, please feel free to correct that anyone…..), if you're using a broker they should know who else to go with.
Finally, if the worst comes to the worst, drop the LVR from 90% to 80% and take out the LMI company. Obviously, you won't get as much equity out but you'll still be able to access some of it.
Which lenderr are you using. Most banks approve their own deals and LMI is automatically approved. This does not work when you use a smaller lender: I would assume this is a small regional bank or non-bank lender. If so try a major…
Andy
Dropping the lvr to 80% or below will not work with a small on non bank lender as in some cases ALL of their loans are mortgage insured.
Richard Taylor | Australia's leading private lender
The new positive reporting which is due to come out next year will work in your favour. Instead of just being able to see applications, they will have the ability to see how much you have actually borrowed.
Banker,
I'm using mortgage company Mortgage Busters Pty Ltd from Brisbane that was recomended to me by a friend.
I haven't been provided with a clear picture what actually has happened and why. I only was told that they first lodged my loan application to QBE LENDERS' MORTGAGE INS LTD and this was the reply they got "overactive credit file".
My application has not been lodged to any bank yet – I believe that it was just the Mortgage Busters company the started the whole processing on their own by doing credit check on me, charging $660 for valuation and then passing my application on to QBE LENDERS' who did second credit check on me the following day morning
I already told the Mortgage Busters Rep to STOP doing any more processing, reverse the damage that was done to my CRAA and refund the money as no valuation whatsoever had taken place.And here I am – scratching my head in disbelief and searching for any good ideas to enable me to move forward…
Richard – thanks for your suggestion to try Gemworth out, Andy's idea of lovering LMI to 80% also sounds like a good one, alas the sole reason for this refinancing was to take out as much cash as possible…
Other than that – I wonder if there's any way to remove such silly things as CF checks done by credit card providers if I didn't take their offer at all?
Anthony
Thats what you get when you use a non-bank lender.
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
Why people still want to go to non-bank lender albeit better product with slightly higher interest rates out there from big 4 ?
Especially one who charges $660 for the valuation. Some friend !!
Richard Taylor | Australia's leading private lender
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