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Annoyed at home loan application

Discussion in 'General Property Chat' started by Kim, 4th Oct, 2016.

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  1. Kim

    Kim Member

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    I'm annoyed after the moment , I am really new to this whole thing and went through the home loan application process. I had a meeting with a Finance Manager to discuss the specific details like the loan amount, interest rate etc.

    He told me the application fee and asked if I wanted it to be submitted. I said yes go ahead, I was happy with everything we had discussed.

    I just got an email to say that my loan has been conditionally approved but they have now increased the interest rate by quite a large amount.

    I will now be charged the application fee of $440.

    Need advice.
    Thanks Kim
     
  2. MC1

    MC1 Active Member

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    Which bank?
     
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    That is frustrating. First step is to get in touch with the finance manager to get it amended.

    Second step, if he can't sort it out, is to get a broker to help you find a better lender - if you're looking to start a portfolio, having a good broker on your side can set you up properly for the long term and also take away the need to deal with banks directly.
     
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  4. srirang

    srirang Well-Known Member

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    Definitely have a chat with a broker, especially if you are planning to build a portfolio not just a one-off.

    There are a few on this forum that are very generous with their help and advice.
     
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  5. Kim

    Kim Member

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    I have asked that the original interest rate be honoured , the Finance Manager replied that there had been a rate change that's come from an Executive level.

    It's not a bank - it's Reduce Home Loans
     
  6. Kim

    Kim Member

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    Doesn't look like they will be honouring it, I had lined up some houses to look at tomorrow but now I'll have to start the home loan application process all over again. Very unhappy with them, it's really disappointing.

    Thanks for your replies
     
  7. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    You're not the first to have a bad experience through them.

    If your situation isn't anything quirky, a broker here should be able to have a look and let you know if a pre-approval is necessary, and give you a borrowing limit for your purchase.

    You can also put a 'subject to finance' clause in your contract - this gives you the best of both worlds and means you can still go shopping tomorrow. :) Give at least 14 days for finance, and then go straight to a broker to get it done.
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    How frustrating :-(

    Let me guess - they sell cheap rate?
     
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  9. Kim

    Kim Member

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    Thanks guys :) you have cheered me up.

    Yes they advertise really cheap rates! Sucker people in and then shaft them. Mmmm I should have known..... oh well you live and learn as they say.
     
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  10. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Most likely you were originally quoted on one particular product at the best case scenario. When you actually apply for the loan, there's a higher LVR and thus the rates increase. Most lenders are charging rates for > 80% LVR these days. The fact that they quoted you on a scenario different to your actual circumstances suggests they're simply selling on rate and not advice.

    Needless to say it's got nothing to do with the 'executive level'.

    If it's an investment loan, the application fee is $440 (according to their website). There's also a few more fees (which aren't application fees, so technically they're not lying):
    $250 valuation fee
    $330 legal fee
    $130 settlement fee

    Odds are that as they're a mortgage manager, their rates will slowly creep up over time as well.
     
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  11. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    As suggested get a broker to run the numbers and "pre-approve" you.

    Preapprovals are for the most part a waste of everyones time and just a sales tactic to make you feel obligated.

    A decent broker can tell if its a deal and advise on structure and borrowing capacity without lodging applications and causing unnecesaary hits on your credit file.

    The lender your dealing with sounds transactional in nature and not strategic.
     
    Last edited: 4th Oct, 2016
  12. Kim

    Kim Member

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    Good idea everyone, I'll definitely get a Mortgage Broker.

    Peter - I was quoted on my personal circumstances and with the correct LVR. Absolutely nothing has changed. I was told that the interest rate has now changed by upper management.

    I received a written quote which outlined all of the fees etc. They actually charge $1150 in total, Transfer Fee $571, Mortgage Registration Fees $175, Solicitor Fee $1500. I have slightly less than a 20% deposit which he knew about from the beginning and that's what my quote is based on. The LMI he quoted is approx $4500.

    I told him to go ahead with my loan because he offered me a good interest rate and I was happy with that. I only got an email today saying they have now just changed the interest rate on me.
     
  13. Kim

    Kim Member

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    Ps it's an owner occupied loan now (not investment).....
     
  14. Kim

    Kim Member

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    His reply is below:

    Hi Kimberley,



    Unfortunately this is something that has literally changed since we first spoke and arranged the loan. This has come from an executive level and I have no control over this.
     
  15. Brady

    Brady Well-Known Member

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    Disagree - a fully lodged pre-approval is great with the right bank.

    - Can lock is policy at the time of approval, extremely handy when APRA was stomping around
    - Can lock in pricing discounts
    - Can be used for negotiations with some agents
    - Some agents/builders won't speak to potential buyers without them
     
  16. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Pipeline stuff for sure, as per your note above can be very useful, even now.


    for those with a decent score, or LVRs at 80 or below

    for those starting at for eg CBA score of 3 or 4, a couple of "unused" /delinquent/expired pre approvals.

    In part, for those that need the Home Seeker the most, are probably the ones most affected, if it needs to be re run or the val with the conditionally approved lender is rubbish

    ta

    rolf
     
  17. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    How dare you :p

    Which bank, haha?

    Thats semi legit! :)

    Never had an issue that I am aware of, by telling clients to pass on details to agent / builder and ask them to call me. When they call I then very diplomatically let them know that a full preliminary assessment has been completed (exact same process is followed as what an assessor will do at the bank) and our mutual client ticks all the boxes and now the bank just has to agree.

    I reckon the fact that the interested party being the agent / builder etc. actually calling the broker and having a frank discussion (without revealing any more info than is necessary) has a much better response rate than a pre-approval. I also wouldn't want an agent seeing the pre approval figure for obvious reasons.

    If I have done my part right, which I do then a contract of sale follows.
     
    Last edited: 4th Oct, 2016
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  18. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I submitted a pre-approval to the CBA a fortnight ago, got the pre-approval letter within a few hours. Incredibly fast.

    The thing is, there was a number of very quirky issues in the application, I expected a list of conditions to the pre-approval. Instead I got the standard, "Subject to verification of financials," clause. It makes me think the pre-approval was automated based on the data I submitted, nobody had actually reviewed the file.

    I agree pre-approvals can be worthwhile, but only if they're properly assessed. Otherwise my own opinion as a broker is worth far more.

    I also know that 60% of pre-approvals never go to settlement, but still require 80% of the work and expenses to submit.
     
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  19. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    Yep, waste of everyone's time imo.
     
  20. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    C
    Cba are now not fully assessing AIPS for some brokers - and will be rolling it out across the whole lot over time. I imagine you will be able to request a full assessment though, prob through the BDM.