Finance declined. What now?

Hi guys,

Could use a bit of advise here. If you have a construction loan/ land refinance declined by a lender, can you immediately apply to a different lender? I know I am vague, but my application has not been approved nor declined yet. It has been referred to the credit assessor for manual assessment. What does it mean?

Thank you.

 

Just wait and watch till you get confirmed answer.

 

Thanks. It is hard though. I need to have a plan B. Just in case.

 

You can apply with another lender but you need to be wary of multiple hits on your credit file.

Before you use another lender you really need to find out the reason for the decline to ensure that the next lender doesn't decline it for the same reason.

Getting referred to a credit manager for manual assessment is a normal thing and I wouldn't be too concerned about it.

 

Files get referred to senior credit officer for various reasons.

Plan B, speak to your broker/banker to speed up things or get another pre approval for you.

 

Applications get referred for manual assessment all the time - don't stress, it's completely normal.

 

Doesn't mean much at all. With some banks thats just the standard response (usually the smaller ones) you get off the system when you hit submit.

With the majors, it just means their credit scoring system has probably picked up something for the assessor to review. Often its for credit scores within a certain range on a banking system.

Every deal gets reviewed by an assessor at the end of the day, so its really no big deal. With some banks, for cash outs, it may mean additional documentation (NAB often do this, as its a guide that their credit scoring system has rated the deal a higher risk. I've seen it happen to auto conditionally approved deals too though).

I wouldn't go shopping for credit based on this alone, unless your existing broker is indicating its best to try elsewhere for some reason.

Cheers,
Redom

 

Take a deep breath - as others have mentioned, it's quite a normal response.

Don't go and apply with other banks - best to wait until you hear back from the current lender.

Is there any particular cause for concern?

 

Thank you kindly for all your reassurance and advice. I suppose I will just have to wait until I get an answer. It is just killing me though. It is not that I totally expect plan A to fail, just that I like to plan ahead just in case it fails. I like to know that there still might be a chance. After all some of you fine people on this site have written a lot of loans some straightforward, some less straightforward like mine perhaps. Just wanted to know that there will be light at the end of the tunnel eventually.

Cheers!

 

Im sure you will have disco lights at the end of the tunnel - which lender is it?

 

To Jamie Moore,

Construction loan/ refinance ? Serviceability. Property value good for the LVR. Meaning can go as low as 73% LVR and still be able to afford construction as I have funds of my own. Question is - is my income vs monthly expenses enough to support the loan if the current lender says no?

 

A bit late for disco lights.... lol. Some 20 years ago I would have jumped at the disco lights opportunity. .. Lender is NAB.

Cheers

 

Broker would've tested serviceability before submitting the loan application. So if thats the main concern, should see plenty of light coming your way soon!

Usually you have a very good sense for it (calculator broker uses is the same the bank uses and are generally accurate if you input the data correctly).

 

And yeah, thank you Rolf. Good advice but if you were me, wouldn't you just hope you had a crystal ball and see if your loan would be approved? Alternatively, wouldn't you like to know that there might still be a chance in the not so distant future ( I.e. a month or so? ) It is just human nature...

 

NAB direct or nab broker?

Either way - the banker/broker would/should have assessed your borrowing capacity before submitting so hopefully that's not an issue.

Good luck - I know it can be stressful but sit tight for now.

 

It's NAB broker. I am sure my broker has done all due diligence before he applied. I have no problems with that. Just that I wish I would have had an answer. It's only been submitted late last week. Just that I have probably drove him insane with my fears. The poor guy I think deserves a break from my constant insecurity. Hence, here I am.... Apologies, but I need to know that there is a plan B...

 

My feeling is your loan will be approved...Low LVR and it's NAB + the broker would have done a servicing test for sure before submissio + from your 1st post it's an refinance deal as well.

Plan B - find out what your chance of rejection is first and for the reason?

Credit scoring reason - take the loan to Suncorp/ Macq / Rams etc...all who dont credit scroe in the 80% space.

Valuation- Do an upfront val with CBA etc...

Servicing - Firstmac etc...

Acceptable income - ANZ/ CBA etc...

Exist strategy ( ie age) - i doubt it....

there's probably a handful of decline reasons and to be honest if NAB rejects it...it's got to be a "serious issue" as NAB tends to be the easiest bank for approval.

 

Hope you are right. Just that it is nagging me constantly. Just wish I had an answer. I will just have to wait for the answer. ..

 

NAB send any construction loans for manual assessment as a matter of course.
Most of credit assessors there can't analyse deals over a certain amount, construction loans etc.
NAB are a very good lender for construction loans.