Loan structure suggestion

Hiya
I wondering if you knowledgeable People here can help me out with some questions I have in regard to obtain finance through a broker, pre-approval & loan structure? Here’s the situation..
I had a chat to a mortgage broker to gage whether we would be approved for finance to secure a second home-investment/holiday home. We have one in mind and want to make an offer ASAP. He was very confident that we will after looking at our current financials. I’ve been going over our meeting in my mind, and not really sure if this is the normal process when obtaining finance through a mortgage broker. This is our 1st time using one, so this is all new to me & I’m now feeling very nervous!! I wanted to ask you guys what your processes are when dealing with clients (if you”re a broker) & obtaining finance for them. Or if your an investor what your experiences have been.
After we left our meeting, within a few hours the broker emailed a loan proposal which listed our current assets & the amount we will need to secure this house & ask us to confirm if we wanted to go ahead with it. He said he would then do up a loan application for pre approval which is valid for 6months once it’s approved. During our meeting he didn’t go into any detail with us on how he would be structuring the loan? Given that the loan may need to go into my husbands name only, he wanted my income results too? As I said previously, I’m feeling very nervous & worried that it might not be structured correctly to meet our future investing objectivise. Should I be concerned at this stage that they things haven’t been discussed? Or are they normally worked out after the loan gets pre-approved? It’s all happening at lightning speed & I’m usually a cautious snail!!!

 

advice: Hit the return key every so often.

How do you think the loan should be structured?

 

Why do you think the loan may need to go in your husbands name only?

Does your husband earn enough to service the loan by himself?

My usual experience with my mortgage broker has been:

1. Preliminary discussion about requirements
2. Fill out fact finder
3. Send accompanying documentation (tax returns etc)
4. Broker goes through fact finder and documentation
5. Broker provides recommendation
6. Feedback/review

Regards,

Jason

 

Sounds like the op is at stage 6 and needs to go back to talk to the broker about any concerns.

but if they also said they wanted to make an offer asap the broker may have gone to preapproval quickly because of that to give the op that option for this weekend, say.

Partly for this reason, the mortgage broker meeting should be done before you even start looking at properties. But this doesnt make sense to most people.

op, post the questions you want to ask the broker here first and people will review them for you. A lot of newbie questions tend to be things you could find out yourself, or are dependent on your situation.

good questions are key here.

 

Structure can be worked out after serviceability is checked. But before submission you need to determine who the borrows will be and this is usually dictated by who the owner will be.

You would also want to sort out funding of the deposit

 

If you're unsure how he's structuring the loan etc then pick up the phone and call him to tell him that you want to understand the structure better, communication is the key.
Did you mention you only want to borrow in your Husbands name ?
Mention you're not needing an approval asap so no need to rush, you would like to understand the structure first etc.
All this needs to be done BEFORE any application is submitted, no point being pre-approved with the wrong structure in place, if you don't feel you're getting the service you need/want then you don't have to use their services, you have choices.

 

Think about what might have happened in the meeting.

op says they saw a place they want to make an offer on, says they dont want to miss out. Its going to be a property they rent out so its negatively geared and they want it in the husbands name because he is on higher income (which has nothing to do with the loan).

The broker knows they need both incomes to get over the line, and wants to give them something just in case they go and make an offer this weekend.

Most likely, incorrect assumptions by the op, and the broker not explaining everything. But then the op should ask.

its happening at lightning speed because you basically told the broker you want to move fast. Go back to them, tell them NOT to apply for anything, and you have questions.

op needs to post the questions they have, then read the responses, then set up another meeting with the broker.

suggest you dont go inspect properties or make offers until you are happy with the loan structure.

 

Specific structure of the loan tends to come after you've signed a purchase contract. You can't really say specifically what the structure will be until you've finalised the loan amount needed. You can't know the loan amount needed until you've confirmed the purchase price.

Given the circumstances, it seems to me that the broker is following a reasonable process. If you've got questions about how they're going about things, you should ask them questions to clarify. Keep in mind that brokers do this every day, so they may not realise that you're out of your comfort zone and have questions. They can't answer questions if they don't know that you have them.

 

Ok, so I’ve got some thinking to do Thanks for replying Terry & giving me a good insight on how the process works

 

Thanks Terry, that makes it a little clearer now. In order to satisfy our asset protection objectives, should I also be seeking advise from a solicitor or accountant and ask them how the loan should be structured? Or do you think it’s not nessessory and to leave it up to the broker?

 

Thanks peter. Yes true, I’ve contacted them-waiting on a reply. I guess I’m looking for another experts opinion for reassurance purposes

 

Best to see a lawyer for asset protection advice as many different laws to consider

 

What do you actually mean when you say, "Loan structure?"