All Topics / Help Needed! / Credit History slowing me down

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  • Profile photo of Tomo11Tomo11
    Participant
    @tomo11
    Join Date: 2014
    Post Count: 4

    Hi all,

    Very grateful for all the helpful posts that have helped me in my investing journey so far.

    I have recently found myself stuck, and hope to hear some guidance on how to tackle a problem with my credit history. I bought a property this time last year through a mortgage broker (who had done 3 credit checks for different loans) and since then have arranged 2 other credit facilities with different banks (one for a margin loan and the other a line of credit for my operating expenses). Now after talking with the bank to arrange a homeloan for a house I am currently interested in, they have declined the application due to my excessive credit queries in the past.

    Now to clarify, I applied for a 95% LVR loan, bad have been advised that the application was kicked back by the bank’s insurer (QBE).

    So my question is, for those of you who perhaps have an aggressive acquisition strategy or have found themselves arranging credit agreements frequently, is there a way to progress without this sort of hinderance?

    Appreciate your help in advance,

    Cheers,

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    The trick is to only limit credit hits by getting it right first time around.

    You’ll need to put this next deal up with a Genworth backed lender with a DUA and preferably no (or not brutally harsh) credit scoring. At 95% it’s going to be hard – at 90% you’d have a lot more options.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of JpcashflowJpcashflow
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    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Agree with Jamie, reduce your lvr and you might have a few options.

    Did you deal directly with a bank or your mortgage broker in this case?

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

    Profile photo of TheFinanceShopTheFinanceShop
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    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    You may be able to do it at 95% – you need to go with a lender that doesn’t credit score and and has their own DUA. Suncorp comes to mind but you need to be able to serve well.

    TheFinanceShop | Elite Property Finance
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    Residential and Commercial Brokerage

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Only issue with Suncorp is that they’re backed by QBE and OP has already been knocked back by them.

    Agree with no credit scoring and DUA though.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    1. Find lender with DUA with Genworth ( the other LMI provider) OR an internal LMI provider …ie not QBE — This option you still only really have a medium size chance of approval as you been rejected by QBE previously and Genworth will always ask ” have you been rejected by a LMI provider in the last 12 month” so your file needs to be absolutely strong + most of the internal LMI provider that does go to 95% ( ie Westpac and ANZ) still have strict conditions and most importantly they still credit score.

    2. Go for a non-bank that offers NO LMI at 95% but instead charges a once off risk fee ( similar to LMI); def higher chance of approval. ON average most client who goes for the risk fee would have either a very active credit file ~25-40 in the last 12 month and want to apply for a high LVR OR some sort of bad credit ( discharged bankruptcy, listed defaults, judgments etc..).

    Risk fee is 0.5-2% higher than LMI cost, depending on lender.

    Option 1 is def preferred…if your file can pass the lenders DUA + credit scoring.

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Tomo11Tomo11
    Participant
    @tomo11
    Join Date: 2014
    Post Count: 4

    Thanks so much everyone for your quick and very helpful advice! This has defiantly made me aware of the options I have.

    @jpcashflow – I applied directly to bankwest.

    It helps to know that some banks mentioned above also manually assess applications (taking into account the individuals cashflow and serviceability ect) as the property I am looking at provides for a net cash inflow.

    So I think my plan for action now is to enquire with a ten worth backed lender to see if they can do this deal, and perhaps I will lower the LVR down to 90%. Open to suggestions if anyone knows any good Genworth backed banks (or banks with a DUA), and also where would one find out this information without calling all he banks?

    If this fails, I may have to follow the option suggested by MICK C, paying the risk fee with a non bank.

    Once again, really appreciate your help guys, Cheers.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Tomo, That is what a Mortgage Broker does for a living so i doubt any of us will be telling you which lender to approach directly.

    Not convinced you will find Gemworth touch it with a barge pole especially at 95% lvr.

    Why don’t you approach Mick C and get him to look after the deal for you.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Hi Tomo

    This is a classic example of what happens when people try to sort out finance by themselves, think it is a good idea to “shop around” and consequently have lots of banks hitting their credit file. If you went to a broker, he/she would know which lender to go to, given your circumstances. This is because they write loans for other people all day every day. So for eg they will know “oh not that lender, because this applicant is a contractor, and currently that lender doesn’t approve many loans for contractors”.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hi Tomo,

    You might be doing more damage then good, applying with a different lender again.
    I strongly recommended getting in touch with a mortgage broker you fill comfortable with and don’t waste time or damage your credit score more by hitting banks.

    Jacm has pointed out some very god points…..

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

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