CBA pre-approval

Discussion in 'Loans & Mortgage Brokers' started by RichardN, 25th Jul, 2019.

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  1. RichardN

    RichardN Active Member

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    I have pre-approval for home loan from CBA a month ago but just changed the job last week. As part of the approval provess, i have submitted a lot of documents and also letters fr o m HR on my employment.

    Does CBA ask for any employment documents/pay slips to provide final loan approval if i am successful in auction/ sign the contract for the property in next few days / weeks?

    Since i changed the job few days ago, it will take few weeks to get new pay slips and possibly approval process again. I just want to sign the contract if I find the right property but worried CBA might say pre approval is not valid because I changed the job..
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    You should disclose the change of jobs, I'd talk to your banker/broker before the auction to get their take on it.

    There's a good chance that the CBA will ask for an updated payslip regardless. At that point they're probably going to find out anyway.

    The good news is that the CBA probably won't be too bothered about it. The CBA is one of several lenders that finds consistency of employment is more important than being in the same job for an extended period. Chances are they'll ask for a copy of your new employment contract and possibly the first payslip when it becomes available.

    I've written a loan with the CBA where we applied on the day the client started his new job. It wasn't a significant problem. Last week I submitted an application to Macquarie where both clients returned from working in Europe about a month ago. Both applicants are in new jobs, one doesn't have a payslip yet. Again it's not a big deal.
     
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  3. Property Twins

    Property Twins Buyers Agents & Finance Strategists Business Member

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    @RichardN
    Based on my prior experience, when you go for formal approvals you will need to provide new employment details, and the bank will reassess it, as circumstances have changed.

    Assuming income is same or more (and you service), as Peter said, CBA will be just fine with it.
     
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  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    You’ll need to provide updated docs when converting your app to formal approval.

    At that point - they’ll realise the change in employment.

    On a positive note - Cba are one of the better lenders when it comes to lending whilst starting a new job. They generally don’t have an issue with it.

    All in all - I’d be asking your broker to amend the existing preapproval to include your new job and send in updated payslips etc. That way you’ll have peace of mind when bidding at auction.

    Cheers

    Jamie
     
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  5. RichardN

    RichardN Active Member

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    If I say, no change of circumstances, do I still need to submit the latest pay slips to CBA. I have been told that as long as I sign saying that no change of circumstances, don't need to submit any employment related letters within 3 months of pre approval. How was your experience with CBA ( specific to CBA). Heard that not a huge risk if i sign as i am on new job with the similar kind of salary..
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Most lenders start asking for new payslips after about 6 weeks. It's probably going to happen, which is why all us brokers are suggesting you get in front of it.

    Better to be upfront with them and for them to say no problem, rather for them to find out anyway and wonder if there's anything else being hidden.
     
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  7. Property Twins

    Property Twins Buyers Agents & Finance Strategists Business Member

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    You should either declare now before the auction and have it reassessed. You will have to advise regardless of income being the same.

    As Pete said, better be upfront about it.

    CBA policy is fine with new jobs.

    Unless you were relying on bonus income overtime for servicing?
     
  8. RichardN

    RichardN Active Member

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    You are correct.I was relying on bonus income of 11k. My broker checked the borrowing capacity again with the new CBA calculator, same salary, no bonus, borrowing capacity came down ~ 60K. I was expecting it Will neutralise with the new borrowing calculation changes, no bad news. I might need to go to non banking lenders.
     
  9. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    You've got a point here. No guarantee of the bonus in a new job. Most lenders aren't going to accept bonus income until you've been in the job at least 12 months. Sorry, no easy answers on this one.

    Make sure you've got a finance clause in place, don't buy at auction, try find a backup lender...
     
  10. RichardN

    RichardN Active Member

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    Is there any banking lender accepts the bonus within 12 months of joining. I will be exploring non banking lenders.
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    The problem is you can't prove a bonus if you haven't already been paid that bonus in this job.

    If you have other debts, there are lenders that treat these much more favorably, in turn improving your serviceability to the point where you don't need the bonus. Perhaps there's another way to demonstrate serviceability outside of bonus income.
     
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  12. RichardN

    RichardN Active Member

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    If it's quarterly bonus and if I get first bonus, do they consider?

    When you say other debts, do you mean debt against other IP/ PPOR?
     
  13. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Most lenders want to see bonus payments over at least 12 months.

    Other debts against property, investment or owner occupier. A few non-conforming lenders treat them much more favorably. The catch is they tend to be significantly more expensive but they could be an interim solution until you've got a year or so in the new job.
     
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  14. Brady

    Brady Well-Known Member

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    I'm going to go against the grain here...
    what industry are you in? Is it one where bonus and commission are typically earned.
    How long have you been working in the industry?
    Can you show that you have constantly earned bonus through this time?
    I think you would have a chance now as long as your contract stated a possible bonus amount that was equivalent to your previous 2 years bonus earned
    And would go step further and say once one bonus payment is earned again pending equivalent amount you would be alright.
     
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  15. RichardN

    RichardN Active Member

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    Great. I am in IT pre Sales and in IT industry fr o m last 16 years and getting bonus from last 6 years or so. I have bonus component in my new offer letter paid quarterly.
     
  16. sumterrence

    sumterrence Well-Known Member

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    Another option is you can try NAB, as NAB can consider your income even if you just started your new job as long as it is permanent. I've written plenty of loans where I only rely on the client's employment contract before they received their first payslip for servicing.

    Not trying to go against brokers here, but NAB has this weird system where the servicing calculator is more generous with NAB direct retail I compare to the broker calculator due to the fact that in direct retail they don't tax rental income, this may help with giving you some more servicing back to the equation.
     
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  17. sumterrence

    sumterrence Well-Known Member

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    Regarding your bonus income, as long as you can show consistent bonuses being received previously for 2 years and can show that in your new role you will be potentially receiving more bonuses (same role same nature but better bonus strcutre) you maybe able to get exception to also consider your bonus income form your previous role.
     
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  18. RichardN

    RichardN Active Member

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    Thanks @sumterrence. Good inputs and will try with NAB and see how I go.
     
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  19. Brady

    Brady Well-Known Member

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    @RichardN wouldn't bother going to NAB yet, shouldn't take more than 48 hours to get your existing application updated.
     
  20. RichardN

    RichardN Active Member

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    Went to NAB in Sydney CBD today and they said that no difference in servicing calculators between what they use and brokers. But ill still send details for calculation if it's make difference.

    Bank said that they can't consider any bonus unless I spend two years with the new company.