Dual income First Time Home Loan - Stressing out

Hi all, I was hoping to reach out to the community as I'm having I believe a difficult time in getting a loan for a PPOR.

I am self employed in a company with directorship for nearly 4 years. I stepped down from the board of directors to engage in the work more establishing a new sector and minimizing my day-to-day overseeing responsbilities. I have been a director for 3 years, and reappointed again more than 7 months ago. I never stopped working or resigned. The other director forgot to reinstate me earlier in the ASIC database -_-.

My partner is a PAYG who is now a FT employee at one of the big insurance groups.

We contacted a broker, applied for and received a formal pre-approval for a low doc loan when
- we are engaging in 80/20 LVR. With 20% deposit and have enough balance to go up to 65%.
- it had been only 3 months since the reappointment of my directorship.
- Partner, on an indefnite visa, still on TR with PR application in process - was still on a dependent contract with the employer.

I queried with the broker at the time about the expiry date of the pre-approval, in which the broker said it's relatively simple for them to ask for a extension.

Afterwards, after being uncomfortable and the disatisfaction of communication and ignorance of the broker I was recommended and referred to another broker.

We then were the highest bidder at an auction and paid our 10%. Settlement is end of next month and was for 120days (long settlement).

Since then, the new broker has slowly began putting me back into an uncomfortable position. I believe the new broker is working dilligently. First attempted to apply for a full-doc with one of the big 4 banks, in which the new broker advised it would not go through as my two years of company financials were both not in the positive. FY19 is positive, FY18 was not.

Now they have applied for a low doc loan via a mortgage manager - in which turns out the funder is the exact same lender as before for our formal pre-approval we recieved. This time around, because the pre-approval has expired, we are applying straight for an unconditional approval.

The mortgage manager has communicated that upon contact lender will consider our application (not sure what this means, does this mean they will accept the application?). It appears they have been processing our application for a dry run. They are now asking for explanations and additional documents/information for things such as: gap in directorship, new accountants statement, my partner's PAYG summary for the last financial year.

I believe our situation regarding serviciability/employment history/savings balance was worse during the pre-approval application than it is now. But why does it seem harder than ever now?

We have got just over a month to obtain funding for settlement. It is in my natural behaviour to find out how things work.
I am super stressed, I've never done this before - can anyone shed light on this situation for me? Am I overthinking this? When do I need to inform my conveyancer by with the loan? What sort of relationship do mortgage managers have with their lenders? Can anyone help?

I am freaking out.

 

It is hard to comment without having all the facts laid out - I'd suggest you need to be seeking clarity from the broker who is managing the process for you.

You could have two identical loan applications and submit to the same lender and have two completely different experiences / processes - sometimes it comes down to the individual assessor / credit manager that is looking at the application.

How long since you submitted the new application for approval? In theory a month between now and settlement should be enough time.

 

Thank you for your reply.

The new unconditional loan application has been submitted on the 24th of Jan, 7 business days from then takes us to today. Due to public holiday dates an all. I understand credit is considered cheap now hence and places may be are delayed as result of the demand from their traditional 3-5 business days.This is why I believe it was a dry-test as my accountant has not had any contact from them yet.

The additional information with an updated accountants statement - due to the previous one lapsed has been sent today. I figured that it will probably take another 7 days from now in best case scenario.

I feel a bit rotten about this - but upon receiving instructions for additional information, I contacted the credit manager directly from the mortgage manager company for clarification.

The broker insisted that my partner needed their PAYG payment summary and that we should contact the payroll for it, in which is not available in her office as they do not give PAYG payment summaries but lodge directly to mygov. Not happy about this I contacted the credit manager directly and found out the new "income statments" extracted from mygov are suitable. As you can see, I lost faith in the broker but all methods of application still go through the broker.

How do mortgage managers work? Do they relabel the products under their name? Are they essentially brokers for brokers? Do they end up on our contract as the mortgagee or is the actual funder going to end up being on the s32 contract?

 

Since you have already committed to a purchase I would suggest you try your best to fulfil whatever documentations they ask for as you need to meet the settlement deadline.

I'm not sure what mortgage manager you are referring to, but try mention to the broker to give Rams a go for low doc.

 

99.9% of the time they never contact your accountant directly for information, they go back to the broker with a list of requirements/clarifications

It's the same thing essentially, by a different name, had you advised the broker that the employer no longer generates PAYG summaries I'm sure you would've received the same response.

Best thing to do is satisfy the outstanding requirements - you might not have formal approval yet but you also have not been declined.
Auction purchase without a credit assessed pre-approval is what's made this situation even more stressful unfortunately.

 

Hi all been a while - I've been working at this some more for the last few weeks.

Just wanted to share my experiences.

I was right to lose faith in the broker and I had the worst experience with the entire process.

Now that I'm stress free now basically I remember very clearly and can refer back to email trails that the broker pointed out that fulldoc was not an option because my Pty Ltd had tax losses carried forward from previous years. I remembered I queried about this on a phone call but I got jargon english as a response.

My gut feeling tells me that the trail commission and the upfront commission they receive on a lo doc loan is substantially higher than a traditional full doc loan. I'm not a broker, so I could be wrong.

I found it riddiculious that the broker, after 3 months of holding onto copies of our id and after them signing declaration forms that they have verified our id....i was asked to resend a copy of my drivers license because the photo was blurry. This process is basic admin. This is not excusable.

I also found it even riddiculious that they needed two forms of income proof - and that they as well the lender attempted to contact HR regarding my partner's employment without consent. Obiviously they weren't happy with us because they couldn't get the information they provided.

To me, after having to jump through hoops and correct the broker - excuse the frustration comment - but they couldnt even tie their own shoe laces let alone than to get a loan for a client.

So this was my solution:

Moving forward, I approached directly to a big 4 branch. Luckily a friend was on speaking terms with the lender...and kept up with the entire experience/story we were going through.

We had a preliminary assessment "dry-run" chat with the home loan exec... in which they told me that our situation was straight forward and easy to get a loan. So we booked for 2 days afterwards to begin the home loan application.

After the application was submitted - within 48 hours we were approved for the loan unconditionally. Just had to go and sign the loan docs.

 

Good job.

It sucks when the inexperience need to hound the paid professionals.

 

What is funny about this is that the Big 4 I am now approved for - was the same bank the broker "attempted" to apply for me in the first place.

From previous Credit searches the broker's companies have been established since 2015. It's alot of mumbo jumbo though. I can see multiple group entities. The addresses are all over the place. The one I signed in the client "onboarding pack" shows a different address to their office - and the addresses in the ASIC register aren't the same either. There is a mixture of old addresses, office and current residential.

I chose to place my faith in the broker because they came highly regarded and I didn't expect them to overpromise/underdeliver.

Some signs that I found trivial began with email etiquitte. It's quite amusing that some people can address the email starting with HI not Hi these days.


I'm open to additional Q&A if it helps anyone out there.

 

Curious to know why you went with that broker in the first place, were they recommended to you by family or friends or someone else?

 

Sounded terrible, but great to hear you got there in the end.

Sounds like you ended up with CBA? Home Loan Executive.

 

Yes. This was a from a very strong recommendation from a family member. It was not until after I decided to work with the broker - they didn't end up going with the broker either because their significant other was not from our neck of the woods and already had a preferred broker.

Appreciate it. I couldn't be happier with the result.

The banks like to give out swanky titles hey? haha.

Another thing that was most amusing - was the fact that the "inital" application with the full-doc big 4 bank is the same one I approached directly and got approved for.

 

Just following up on this.

The broker was also a prosepctive client of mine which didn't end up going ahead. I kept their contact however from prior meetings. The referal was the push to use them.

As a small business owner myself who started with the minimal capital funding - I know it can be quite rough. It is because of my past experiences that I believe I show more patience and give more "fair-go's" than the average person. I guess my idealogy and method of supporting was based on overlooking mistakes and to work with. But enough was enough.

 

Glad you got the result you're looking for.

Yes CBA little different to other banks, there is actual reason for the titles.
CBA has 3 titles
- Home Lending Specialist
- Senior Home Lending Specialist
- Home Lending Executive

Tip for the forum, stick to Home Lending Executive and you will probably stay pretty happy.

Not surprising at all. Direct bankers should know the policy far better than a broker who has multiple banks on their panel.
And a Home Lending Executive likely has years of experience, writes a lot of business, has good connections in the right areas.

 

Should but often don't - the amount of times I've had to educate CBA's "direct bankers" on their own policy is ridiculous, seriously bad, like they hired them with no experience and no training.

 

So they recommended the Broker without using their services first? Strange they didn't recommended their preferred broker.

 

Agreed... which is why the recommendation to stick to Home Lending Executives.