Is it rude to talk to bank behind the brokers back?

Hi all, I'm in an odd place where I get paid well enough (so can borrow a fair bit) but don't have a great deposit (so actually can't borrow a fair bit XD). As such I talked to a few banks and brokers until I found a broker I like.

The guy is nice, he gives me great advice, but hasn't been super forth coming and hasn't told me "how much can I borrow". I think the issue lies with my deposit, as I sit at 5% to 10% LVR range it really depends on "what and where" specific banks are willing to lend me. So the guy said we'll just go for full approval when I find a place.

Still though I keep getting asked for a bank pre-approval when I talk to agents. I sort of kind of want one just to see where I sit as well. Will a single pre-approval be a big deal? I did talk to my own bank a long time ago, and they were happy to give me a pre-approval once I pass them 2 work statements (as they have all my other details already).

But I worry I'm going behind my brokers back and could be a little rude when he does go to help me with a place and see's I already have a pre-approval, or if it affects my chances in the future if I apply for a different bank (through him).

 

Just tell the broker the truth and work something out. Most lenders nowadays do a lazy, auto-approval anyways (no assessment, just a quick document checklist and if you have them all, they'll give you an approval subject to blood test and all, AND you'll get a mark on your credit file). It really is no different from your broker telling you "this is how much you can borrow subject to x, y, and z". If you want it to be more formal than just an email, I'm sure your broker can slap on their company letterhead to make it fancy.

Understood that a lot of agents require pre-approval nowadays. But with "fully assessed pre-approval" you're narrowing down your options. It's a battle that you need to pick; committing to a certain lender before you know what you're buying. UNLESS you know for sure that you'll be buying a unit vs a house in what suburb. There's an easy postcode tool that brokers use to determine max LVR in certain area for certain lenders.

 

trust no one…… I like it

 

As I broker, I would prefer for you to be clear that a firm borrowing capacity is important to you. It will give them the opportunity to provide what you need and build a good relationship, and they might write you something to give to the real estate agents if that's the main issue.

 

Is there any reason why the broker isn't providing a borrowing limit figure? Even if there is a lot of difference between the banks, the broker should be able to say 'these are the top two'?

 

Without knowing anything about your specific situation, I'd be concerned about a 90%+ LVR application without any form of pre-approval, particularly if you're trying to purchase something in a competitive market (which is almost everything everywhere at the minute...)

 

If the limiting factor is your deposit and not serviceability, it should be fairly easy to verify your maximum purchase price, as long as you're reasonably clear on what you're hoping to do.

If you need to borrow more than 90% you definitely need a fully assessed pre-approval, which can take weeks with some lenders. Many lenders are not doing pre-approvals at all.

Going direct to lenders for high LVR loans probably isn't going to get the best result. Many lenders can't do them and there can be significant differences in what you get with those that can do them. You'll probably find a lender that can do it, but you could be locked into a lousy deal for a long time.

 

I think this is the reason why I'm looking elsewhere. To be fair I haven't specifically said "give me my borrowing limit", but I have talked about it and the reply is closer to "let me know what you're interested in, and we can go from there". I guess this was my assumption as well is that they could give be a ball-park figure so I don't go chasing property $100k over my price range.

 

I didn't know this existed, I googled a few and its very eye-opening and super helpful! Thanks for letting me know about the tools.

 

You really shouldn't have to - what's he actually done if he hasn't checked your borrowing capacity? How can he give you advice when he doesn't know what you can borrow?

It's kinda confusing to me, TBH. Checking borrowing capacity is literally the first thing we do, along with a red flag check - so straight away you know what you can go out and do, along with anything you need to be aware of that might tip things over.

 

Thanks for this! I think maybe thats why I'm looking for a second opinion (bank in this case), I'm new (first home) but I was a bit surprised I wasn't told any price amount. I was thinking maybe its because my deposit is too low that each time I ask they have to assess the full situation? But I still feel any amount or idea would at least give me a ballpark so I don't start asking for things outside my reach.

 

Go back and ask him what you can do right now, with your current deposit. He should be able to tell you that, and if it's not enough, also tell you what you should be aiming for.

 

If you told me your total deposit available and servicing is strong you can work out max purchase price from that figure alone.

 

Which makes me think the op's broker isn't very good.

 

Maybe I'm thinking a bit too much to it, but then again I do agree even an aim to what to look for would be helpful? The guy is super nice, but maybe because of that I'm being a bit too open?

If it helps here, I make about $105K a year (stable permanent job, no debts except HECS, no kids, no significant other, pay go's up about $2k to $4K a year) but my deposit is at $45K (parents are willing to add $5K if I need it, brother is willing to add $10K if I need it but this is really back-up money I don't want to touch, parents are willing to put their second house as backup if I need it).

I guess the thinking is that the $45K deposit is low, and it depends on whether its a new property (can use $10K for deposit) and willingness of the bank estimate which is what makes it yay/nay?

But still though as others put it, is this yay/nay for a $400K place? $600K place?

I didn't say it before, but cheers everyone for the comments/thoughts.

 

A basic rule of thumb for a 90% lend, is 10% deposit, 5% purchase costs & 2% LMI. So you need about 17% of the purchase price.

Hence you can divide your deposit bu 17% to get the price your current savings will accommodate.

$60k ÷ 17% = $350k

95% loans are possible but I generally don't recommend then for investment purposes. The LMI trade off is very high, as are rates and the equity position means you'll wait years before you'll have anything useful.

 

Maybe it's helpful working the other way too. It cost me around $160k cash for a 80%LVR loan on a 640k investment after all fees etc.

I.e. you'll need more than 45k once all the fees come out