Application with higher credit team?

Hi all

Loan was applied with Virgin Money using a broker. Assessor assessed and recommended for formal approval to credit team. Now, broker is telling me that there is a problem that the application is deemed risk by the credit team and has gone to the higher credit team?

What does this all means?

 

It generally means that something is outside the parameters of their normal credit policy and they need to send it to a more senior credit manager to sign off on the exception.

This is a fairly common thing to happen in the current environment with many different lenders. Many assessors don't have the DLA to sign off on exceptions (or above a certain loan size) hence they need to send to someone who can.

Your broker should be able to give you more information around what the specifics of your deal are.

 

I was advised that's its due to my other half receiving job keeper and a high reliance on rental income. Hopefully, the application will get approved even if it's a lower borrowing.

Thanks for your clarification.

 

Update

Virgin money has gotten back to us and is only willing to finance $272,560. Breakdown as below:

Land: $340,700
Build: $226,470

This means only a 48.05% LVR. And it will be our PPOR. I was expecting that they will reduce the LVR but this much?

Is there anything that can be done? Reason we went for virgin money was because it was the only lender that we pass the serviceability calculator test for 80% LVR but it seems like it backfired for some reason.

Suggestions on which other lender we can look for in this current covid situation?

 

What info do you need? We did use a broker.

Our DTI ratio before considering the new loan applied is 48.8%. Is this a bad number?

 

It's DTI. I use monthly expenses including loan repayments divided by gross monthly income.

 

No credit cards. Is total annual income total gross? Debt balance is loan balances correct?

 

All fair questions for the broker that was handling the process. Asking third parties who lack the facts is really just guessing.

 

Agree. Just wanted to arm myself with facts before discussing with the broker.

Apparently virgin money recently changed their DTI requirement and is applying in retrospectively regardless of when the loan application was submitted? Can they do this?

My broker advised that virgin money did sent a written communication that policy changes will only affect new applications and not old applications?

As of now, she says she is fighting for the deal.

 

Yes they can apply retrospectively. Depends when exactly it was submitted and how much info has been supplied by the broker. If DTI was high broker should have been aware to provide as much information as possible to credit. In any case like everyone says you probably need a good broker to get you over the line if possible..

 

18% without considering new loan application
12.65% once include loan balance from new loan application

 

5.18 before considering new loan application balance

7.91 after considering new loan application balance

Is this the reason why? If virgin money were to approve the loan at 80% LVR, it brings us to above 7?

 

We do have the cash to finance the whole build but would like to avoid that if possible.

Are there any lenders which are more generous with their DTI and serviceability?