Loan without Pre-approval

Discussion in 'Loans & Mortgage Brokers' started by Ron, 22nd Oct, 2019.

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  1. Ron

    Ron Well-Known Member

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    Hiya,

    Just did an online loan application for an ING Orange Advantage offset loan to buy ppor in Western Sydney. The loan officer told me they dont do pre approvals anymore and if I'm keen on a property make an offer then let bank know when willing to go ahead n sign. He said to ask for 10 business days cooling off period and also make an offer with a clause subject to loan approval which sounds right. Then they will process my application and grant loan if all good. Only require payslips, payg summary group cert, contract of sale and bank evaluation of property as I'm already an ING customer.

    Does this sound right, I have never heard of making offer with no pre approval and then bank goes straight to processing n granting loan.

    Ta Ron
     
  2. Property Twins

    Property Twins Mortgage Brokers, Buyers Agents & Mentors Business Member

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    What is the loan to value ratio Ron?

    It happens... but depends on a number of things
     
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It’s common to make an offer without preapproval.

    Just make it subject to finance.

    Cheers

    Jamie
     
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  4. Morgs

    Morgs Well-Known Member Business Member

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    ING stopped fully assessing pre-approvals a couple of months ago, along with other lenders like NAB, Macquarie, etc.

    Given most things are selling at auction at the moment in Sydney it may mean you're unconditionally committed the purchase without an approval. Can't say how much risk there is in that for you without knowing your situation.
     
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  5. Ron

    Ron Well-Known Member

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    Thanks guys, I am actually taking a pretty small loan, got around 75% deposit..

    When do houses go on auction, when theres many interested parties? I have noticed the properties in busier and more expensive areas in Sydney are auctions generally and the dodgier cheaper areas mostly for sale. Is that about right..
     
  6. Redom

    Redom Mortgage Broker Business Member

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    So many lenders do this now - makes pre-approvals a little less valuable than in the past, but does speed it up a lot more. Check in with your banker/broker and see what they say about your situation. If you have something relatively unique, you may want to get a proper pre-approval in place - many lenders do have mechanisms to do this on request (Macq, CBA do it on all, etc).
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Many brokers are also re assessing the context of pre approvals.

    The significant cost to broker of obtaining these, and thus not proceeding, 2 to 5 times becomes a significant financial burden.

    Many lenders now simply rely on black box and wont generally do fully assessed pre apps.

    The challenge is that some borrowers need a fully human assessed pre approval, because the reliance on banker/broker interpretation of things like income may leave a buyer high and dry come settlement time.

    ta
    rolf
     
  8. iwantahouse

    iwantahouse Well-Known Member

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    We just bought our first PPOR 15% deposit without Preapproval. Contract was subject to finance though.
     
  9. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    Perfect - no need fro a pre-approval if you have a finance clause.