Don't want to proceed after accepting Loan Offer

Discussion in 'Loans & Mortgage Brokers' started by Binda, 30th Nov, 2017.

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  1. Binda

    Binda New Member

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    Hi Experts,
    I had got loan approved , offered from one of the major banks. I accepted the loan offer. But we were not fully happy that bank had under-valued the property. So we were trying to get better deal with other bank who could value the property as per purchase price. Fortunately we got successful in our 2nd try with other bank. Now my settlement is due in 2 weeks time and I want to decline first offer given from bank 1; even though I had sent the acceptance copy to the bank about a month ago.
    Can anyone suggest what are my legal obligations?

    Cheers,
    Binda
     
    Binda, 30th Nov, 2017
    #1
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hi Binda

    Just tell bank one you're no longer proceeding with them and would like to withdraw your application.

    Cheers

    Jamie
     
    Jamie Moore, 30th Nov, 2017
    #2
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  3. Brady

    Brady Well-Known Member

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    What process did you go through with the original bank when the valuation came back short?
    What was the discussion, did you look at challenging the valuation or were happy as you could cover it and now changed your mind?
     
    Brady, 30th Nov, 2017
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Normal course of business.

    Not great for a banker or broker,.............................. but it is what it is

    if the loan didnt have a fixed rate lock in payable at application, with most lenders, you wont have any obligation
    ta

    rolf
     
    Rolf Latham, 30th Nov, 2017
    #4
    Brady likes this.
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Standard fees which may have been waived could be imposed eg val etc. Ask them.
     
    Paul@PAS, 30th Nov, 2017
    #5
  6. Watson1

    Watson1 Well-Known Member

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    If your solicitor doesn't book in settlement with the original bank nothing will happen.
     
    Watson1, 30th Nov, 2017
    #6
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  7. Mason

    Mason Member

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    Hi all,
    I have a question re a somewhat similar topic.

    I've recently gone to seperate brokers to get two different opinions re my refinancing options and they're each chatting to a different bank at the moment.

    Today one of the brokers sent me some discharge forms for my current loans as he said it was easier if the bank had all the paperwork from the beginning.

    By signing the forms I was wondering if this committs me to going with this broker/bank? (I don't want to rule myself out of the option if the other broker/bank ends up presenting a better deal next week?)

    Thanks!
     
    Mason, 30th Nov, 2017
    #7
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    No it doesnt commit you to anything generally.

    Just tell the broker that you arent sure you arent going to proceed and to not make a formal application, and that you are shopping around. Better for your credit file too !

    Just as a matter of interest, for your personal case, how do you decide what is a better deal?

    ta
    rolf
     
    Rolf Latham, 30th Nov, 2017
    #8
  9. Mason

    Mason Member

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    In this particular example I'm weighing up between BOM and Westpac. (I know BOM is owned by Westpac but it seems like they have a different servicing calc!)

    Decision criteria:
    1) Who has the cheapest rates (BOM slightly better)
    2) Who I can borrow more with (pretty similar; I'm 'maxed' with both lenders)
    3) Loan features (pretty similar)
    4) Future rates/future equity (unable to answer!)

    If I knew the answer to number 4 then I would base it on that, but since I don't have a crystal ball, and all other things pretty similar, I feel the only way to decide is to go with the current cheapest (fixed) rates, and that way I'll save a few grand.

    Unless I'm missing something major?
     
    Mason, 30th Nov, 2017
    #9
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Possibly as we all do..............

    whats your end goal ?

    • buying more property ?
    • consolidation at the lowest cost ?
    • Debt recycling strategy to pay your PPOR off in much faster time( assuming i have non tax ded debt)

    In 18 years of financial services and goals orientation work, I have found most people dont really know what they want/need because they have never been taught how to find that, school doesnt teach it, uni doesnt teach it, most work doesnt tech teach it (in fact purposefully blurs it), if we are lucky we have parents or mentors that have helped with it.

    Thus we end up making significant life decisions based on what seems like a logical context but usually limits our potential.

    ta
    rolf
     
    Rolf Latham, 30th Nov, 2017
    #10
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  11. Mason

    Mason Member

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    Thanks Rolf. I'm finished with buying property (unless APRA have a change of heart!) and dont have a PPOR yet (I will move into one of my investments in a few years).

    So in a few years I'd say I'll be keen on a debt recycling strategy. How can you tell if one bank is better than another for this, what specifically do you look for in their products?
     
    Mason, 30th Nov, 2017
    #11
  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Dunno, if debt recycling is for you now, or the future, oddly enough, many of my clients with NO ppor use a DR strategy..................because it can reduce the non ded debt once you move inot the future PPOR

    As an aside, if you have the equity its unlikely your buying days are over, unless you call it so.

    BOM is fine for DR this as long as you use their portfolio Product........ useless for anything else in the SVR type product

    WBC is fine, since you can vary loan splits easily

    If you fix it all, then its not an issue anyway............

    on the surface, with the current "apparent" brief of " rate cost" some of the online only lenders will typically provide a lower $ cost of life over a period of a loan............. thats a simple but typically flawed outcome unless u need a basic loan that youwill simply pay off over say 7 years

    ta
    rolf



    ta
    rolf
     
    Rolf Latham, 30th Nov, 2017
    #12