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Approval hurdles

Discussion in 'Property Finance' started by Gruber, 18th Sep, 2015.

  1. Gruber

    Gruber Member

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    I'm needing some advice on how much power you have to negotiate for your individual circumstances for an IP loan. Problem is a contract period of employment (6mths) however previous to this employment has been contract also but consistent, full time, same employer over 4years. The MB is saying that we've not got any room to move but I feel like we should be able to fight a bit more for our individual circumstances (115k+ income, 0 debt, 60k deposit, 25k cash buffer) just wondering what others have experienced when it comes to negotiating finance and if there are any brokers keen to offer their service.
    Thanks
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Which lender are you currently talking to? It will depend on what you're trying to do, as well - if you're under 80% it shouldn't be difficult I wouldn't have thought.
     
  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    Very dependent on LVR and the lenders that you have available for whatever reason (servicing, specific policy, etc).

    The broker may be limited to using a particular lender say for servicing and thats the lender's rules.

    What's the LVR and have you been advised that you are limited to the lenders you can use? Which lender has the broker recommended?
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    If there's LMI involved it could be a hard deal to place due to that 6 month contract.

    How much of your income makes up that $115k?

    Cheers

    Jamie
     
  5. Gruber

    Gruber Member

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    Thanks. LVR 90% currently tried Comm Bank & ANZ, NAB said try to get it elsewhere. Income is 115k pa. Just spoke to MB he is saying that there could be some possibility with a letter from the employer stating that ongoing employment chances are good.
    Would LMI guarantees do any good?
     
  6. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    Is it an IT role? When did the contract start?
     
  7. Redom

    Redom Mortgage Broker Business Member

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    Talk to your broker about testing this scenario out with Homeloans (a non bank mortgage manager who have access to multiple funding lines), if you've been there for more than 6-12 months this should do. I've had a couple IT contractors who've secured finance post APRA with similar scenarios. I've even managed to score a 1 day casual employment deal with them, beauty of having multiple funding lines/multiple credit policies.

    Servicing will be better than the who you've mentioned and you can get around the LMI dilemma by going to a funder that uses their own risk fee model. Plenty of brokers wouldn't have heard of them, so it could be worth raising.

    It will definitely be the type of deal i'd run via the BDM first. Their flexible approach and 'can do' attitude (+ ability to get exceptions) make it a decent starting point.

    NAB will want to see more than 6 months till the end of the contract, may be able to get an exception, although i haven't tried it for this type of scenario post APRA. I'd suspect with their increase in risk based lending, obtaining an exception may be difficult.
     
  8. Gruber

    Gruber Member

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    Not IT, telecoms. Contract began last month.
     
  9. Gruber

    Gruber Member

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    Thanks, quick Q; BDM?
     
  10. Redom

    Redom Mortgage Broker Business Member

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    Business Development Manager - broker contact point. They can discuss scenarios/options for 'outside the box' cases.

    Cheers,
    Redom
     
  11. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    Ok thats good then.

    My concern is that its seems you have already applied with CBA, ANZ and NAB so your credit file has smoke coming from it particularly at 90% LVR for an IP.

    I am really surprised that NAB has knocked it back - was it an auto decline or was it reviewed by credit and then declined? I have 2 applications that we knocked back by NAB which was silly decisions. We have got one overturned and the other is close to getting overturned as well.

    As a first step I would really go back to NAB and escalate to the head of credit or get another credit manager to review. Has the broker done this?

    I am just reluctant to keep trying other lenders your application suddenly becomes quicksand.
     
  12. Gruber

    Gruber Member

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    We're not that far in yet (as far as I am aware) the broker has just been looking at our options we've not gone through any pre approval process as yet as we need to be more certain that it will get us where we want to go to avoid our credit file being affected. Our next step is the letter from the employer then see what the lenders position is then. I just wanted to ask here for any other options we could consider in this type of situation
     
    Last edited: 18th Sep, 2015
  13. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

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    Ok thats excellent then.

    Has your broker run the scenario by credit to see if they are comfortable with the proposed scenario?

    The only issue with NAB is that they have harsh credit scoring for over 80% LVR applications.

    Also your broker is on the right track - the more documentation you can provide credit the more comfortable they will be with the proposal.
     
  14. Redom

    Redom Mortgage Broker Business Member

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    NAB broker require 6 months + until contract expiry under standard policy as far as i'm aware, so you'd have to get an exception to get it done.

    May be an uphill battle doing that now, but likely do-able in the past.
     
  15. tobe

    tobe Well-Known Member

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    Id give it 2 months and then go ANZ. The trouble is your trying to get two exceptions now, you have only been at the job 1 month, AND your work is on short term contracts.

    At 3 months you only have one exception, and for ANZ it isn't an exception.