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Broker says no, Bank says yes?

Discussion in 'Property Finance' started by Dylan33, 7th Jul, 2016.

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  1. Dylan33

    Dylan33 Well-Known Member

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    I have been talking to my broker over the last few weeks regarding purchasing another IP with a cash deposit. After him trying to juggle all the figures to see if I could scrape in with my deposit he informed me that it looked like I would have to come up with more cash before the bank would even consider looking at me. All to do with the apra regs.
    Yesterday I had a call from the same bank that he was dealing with asking if they could answer any questions I had and if there was anything they could help me with.
    I explained my situation and supplied all the info they needed to calculate wether I would qualify for the amount I was asking for. Within half an hour I had the answer I was looking for "should be no problem sir!"
    What the hell was the broker doing?
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Did the bank guy know the purchase price of the property you were hoping to buy?

    It may be servicing is not an issue but the LVR is, which your broker may realise but the banker may not.
     
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  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    A marketing strategy perhaps - say 'yes' get you in the door and then properly analyse.

    Also bank staff have been known to leave out information to make it look better - leave off a spouse or a child for example.
     
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  4. chylld

    chylld Well-Known Member

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    No problem sir! We'll just use your other properties as additional security for the new loan! :D
     
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  5. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    1) Your broker was mistaken
    2) The banker is mistaken (possibly due to not having all the info)
    3) The banker has a healthy disregard for the law
     
  6. Dylan33

    Dylan33 Well-Known Member

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    Believe me. They both had all the info and I made sure we were comparing apples with apples. Non of the other properties were used as security either. Plain and simple would X amount be suffient as a deposit for an X amount loan.
     
  7. albanga

    albanga Well-Known Member

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    How competent is your broker? If very then I would call BS on the bank.

    Before going and taking a credit hit why don't you call someone here like @Terry_w or @Jess Peletier who have responded and see if they can get it to work. If it fails then you know the bank is lying. If it passes you have yourself a shiny new broker.
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If it is just deposit - that is easy to work out.

    Did they check serviceability?
     
  9. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Post it here - purchase price, deposit, bank, and LVR.

    Easy to tell you if it's LVR that's the issue.
     
  10. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    The banker may be neglected to consider that costs like stamp duty, for eg, have to come out of that deposit.
     
  11. neK

    neK Well-Known Member

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    I've had a similar situation. Bank always says yes when broker says no, even with all the information in front of them.

    And no matter how many times i say "NO CROSS COLLATERALISATION" the banker always says "ohhhh yes you have to cross collateralise" when they get back to a day later with the "good news"
     
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  12. vbplease

    vbplease Well-Known Member

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    Our latest ppor purchase was a no from the broker (including partners maternatity leave pay)..

    Top 4 bank said yes using my income alone.. Must be a very different serviceability calculator?
     
  13. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Or knock off a spouse and kids, that can help quite dramatically!
    The calcs 'should' be the same.
     
  14. Dylan33

    Dylan33 Well-Known Member

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    So this is a "thing"?. Well all I need is a pre approval so I have an idea of what I can afford. If I get the OK from the bank with an assurity that there are no hidden extras that's good enough for me. I can't understand why it was so hard for the broker.
    Here's another question. Will I have to ultimately go through the broker even though I'm sorting this out with the bank?
     
  15. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    No - but it would be worth letting your broker know just in case there was some mix up in info early on that's resulted in the banker obtaining a different result.

    Cheers

    Jamie
     
  16. Brady

    Brady Well-Known Member

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    Really Terry - great comment :confused:

    Good to see the forum still the same - brokers are angels


    By the looks of the OPs original comment that would need to come up with further cash, it doesn't sound like a servicing issue.

    @Dylan33 as mentioned above are you able to share the details purchase price, deposit, bank, and LVR.


    They might have accepted the Mat Leave - did you provide letter stating when your partner was returning to work?
     
  17. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes, really!

    But I am not saying brokers are angels - more brokers have been arrested and charged over fraud relating to loans than bank staff.

    If I was going to commit a fraud I would use a broker - next preference would be a bank's mobile lender.
     
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  18. Adelaide

    Adelaide Member

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    There are both excellent and crappy bank lenders and brokers.
    The trick is to find one who actually has investment properties and are successful at it. Most of them are mums and dads working to make a living.

    Most likely the bank has taken the surface level information you gave them and said yes. That's what they do.
    They have not done a detailed analysis and found that your underpants are in fact green when you swore they were blue.
    That includes actually looking at your payslip and working out if they can use it all.

    You want a pre approval with the only condition left to satisfy is the valuation being acceptable to the lender. Rams do those pre approvals and a few other banks do as well. Usually takes about a week and it's a full application you put in.

    Many people get stung with a upfront yes from a bank (or a broker who doesn't know their investment stuff) when they walk in with the contract of sale but the details they gave to the bank / broker just don't match what is written on the paper provided.

    Has both your current broker and the bank lender got investment properties?
    Are you talking the same lingo.
    Are they both willing to submit an application and get a pre approval so the only outstanding condition is that you provide the contract of sale and the valuation is acceptable.
    No? Keep looking until you find someone who can.
     
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  19. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    While this seems like a sensible approach, for those with marginal credit score, it can prevent them from moving forward

    Most pre approvals cause an enquiry on the CRAA file.

    Most lenders will make that same enquiry if the loan isnt converted within 7 to 21 days.

    Unless a client is going to auction, or is "forced" into an unconditiional offer, or has some unusual finance issue we avoid pre approvals pretty much.

    Pre approvals are primarily used as a sales tool by bankers and brokers to "bond" the client to the broker/banker.

    ta
    rolf
     
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  20. Brady

    Brady Well-Known Member

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    I completely disagree with that statement @Rolf Latham in this changing market pre-approval are excellent with the right bank. I had multiple clients that were pre-approved pre APRA which allowed that policy at the time to continue for a period post APRA. For all those brokers and bankers who couldnt be bother or didn't think it was necessary at the time to complete they got caught.

    Now don't get me wrong I'm far from suggesting someone go around getting 5 pre-approvals from 5 different banks, but done corrertly with the right bank and it's well worthwhile. Also and as you stated I find they're great when you're looking for an out of box approval, at a later date when property is found even if it's outside of the 'preapproved' timeframe I find credit assessors are more willing to continue with the approval.

    For most clients I would be doing at least 2 applications prior to purchase, an equity release along with a pre-approval.