Pre approved last Friday. Feeling like a lamb.

Discussion in 'Loans & Mortgage Brokers' started by duinnsleibhe, 2nd Apr, 2020.

Join Australia's most dynamic and respected property investment community
  1. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    Perhaps a little foolhardy to be forging ahead at this time but after being pre approved for a loan quite recently I was wondering what thoughts others might have.

    Never owned property
    Loan approved up to 80% LVR, which makes purchase price no more than $230000.
    I am looking at properties under this price in Mid Coast NSW as a PPOR (have 20% deposit)
    Have stable local govt job (currently 67,000 pa gross) for last 20 years, but currently working from home due to you know what
    Partner earns casual wage (2-3 days per week @ $40 ph) from state govt - so not counting on that
    Inspecting a property on Monday

    Any other info supplied happily

    Guidance? Advice? Pitfalls? Comments?

    Thanks one and all,

    Duinnsleibhe
     
    KingBendtner and Perthguy like this.
  2. mikey7

    mikey7 Well-Known Member

    Joined:
    30th Mar, 2016
    Posts:
    1,159
    Location:
    Sydney, Brisbane
    What's your actual question? What do you want to know?
    What do you want to achieve? In what timeframe?
     
    duinnsleibhe likes this.
  3. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    Guidance? Advice? Pitfalls? Comments?

    Thank you for replying. No specific question. Have no one to bounce my thoughts off so joined here thinking I might get some feedback.

    As stated, looking for a PPOR. Very modest and humble person, with modest means looking to live a quiet life. Really do not know what I am doing. I feel like a lamb to the slaughter in this climate. Hoping for some guidance on the path I am treading.
     
  4. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    ASAP really. Pre approvals do not last that long in my understanding - not that I have been advised as much by the bank but am seeking to act in the next couple of months? Is that reasonable?
     
  5. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    6,028
    Location:
    Australia
    Preapprovals dont mean anything until you have a contract anyway.

    Strangely this might be a good environment for a person with a secure job and modest ambitions. Negotiate hard, lowball. Little competition. Keep your expenses low and pay off the loan asap.
     
    craigc, Lindsay_W, wilso8948 and 2 others like this.
  6. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    This is one of the things that I worry about - getting to a contract and then the bank changes it's position in regards to lending. Climate changing rapidly at the moment


    Thank you for this. It is in line with what I have been thinking. I intend to pay off whatever loan that I am afforded as quickly as possible. Could you please expand upon what sort of things that I might negotiate hard on? This is not a strong suit for me. Your comments are much appreciated.
     
  7. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    6,028
    Location:
    Australia
    You need to know how much a place is worth. One strategy might be to look at places that have sold around 270, 280 etc, and focus on those properties and offer 220. Youll get rejected for most but you might get lucky.

    Thing is, if you look for asking prices around your budget, and offer at the asking, you might be paying too much. The asking price will be based on sales in the last 6 months. In the short term there are no buyers.

    start inspecting, understand the market, but wait a month and see what properties have listed for at least 5 or 6 weeks. Wait for the sellers to get desperate. You might not have to negotiate much, just make a low offer and leave your number. You only need one.

    of course if you see stuff selling fast above your asking, adjust your strategy.
     
    duinnsleibhe and Danyool like this.
  8. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    6,028
    Location:
    Australia
    that is a risk. But thats what the cooling off period is for (in nsw). Make it 10 days or 15 days or whatever you need to make an application. Worst case is you lose a few hundred dollars.

    not too late to get a mortgage broker. Also get a good lawyer, tell them upfront you dont understand the process.
     
    Lindsay_W and duinnsleibhe like this.
  9. marmot

    marmot Well-Known Member

    Joined:
    12th Jun, 2006
    Posts:
    1,215
    Location:
    N.S.W , W.A
    I think if you have a stable government job I would go for it , but definitely drag it out at least a month or longer , the short term accommodation market(airbnb etc) has all been completely decimated, and in many beach side towns all over N.S.W you will probably see quite a few of these start hitting the market over the next few months , and it might be a good opportunity to pick up one. In troubling times its always the Holiday homes that are flogged of first, but realistically it might take at least 12 months before owners start to get desperate.
    For some airbnb homes, they may have been purchased purely on really good short term rental returns, even if they could find a long term rental they still might be going backwards .
     
    duinnsleibhe likes this.
  10. Fargo

    Fargo Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,306
    Location:
    Vic
    I dont think there is any need to rush in. Perhaps wait 6 months when the loan repayment holiday ends and the foreclosures start. While you save more money, and can get a better house, or have a lower debt. Should be easy to do while you cant spend it.
     
    duinnsleibhe likes this.
  11. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    15th Aug, 2005
    Posts:
    7,537
    Location:
    Gold Coast
    Clients of mine are seeing good opportunities.

    If one needs to sell, they need to sell

    Having said that its likely that the market will slow

    Availibity of credit may too though, so its not a simple fluxxy thing

    ta
    rolf
     
  12. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    Thank you for this great commentary. I will certainly take this on board. You have given me some great tips that I can take with me on this journey. I guess that I have a sense of urgency that you have, to some degree, assuaged.

    I am feeling more confident in my approach after reading your comments. Thank you.
     
  13. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW

    Is that long a cooling off period something that is asked for often? In my limited understanding I thought that 5 days was fairly non negotiable.

    I had given up on the mortgage brokers after two that I contacted seemed less than enthusiastic in their response. I ended up taking matters into my own hands and approached the bank that I have my savings with - Greater Bank.

    Any thoughts how I might find a good lawyer? Would a conveyancer be good enough? I don't have a lead on either and don't have anyone that I can ask to recommend.
     
  14. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    I would really love to drag things out but I am sensing that lenders might be less willing to lend as these current circumstances unfold, hence why I feel the need to strike swiftly. Besides, the part of the Mid Coast area that I am concentrating on is actually more inland than coastal.

    There do not seem to be ANY properties for sale within my price range on the coast anyway. I suppose that could change shortly but am in two minds as to whether I should cool my heels and wait.
     
  15. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW

    My preference would indeed be this but realistically, i would be only be able to save another $4-5000 in that time. Whilst that would bump up my theoretical purchase price somewhat, I am worried that the lending market might deteriorate to the extent that I may not get approval on a property or that the bank valuations might be less than people are willing to sell.. Of course, I am a complete beginner here and do not know.
     
  16. Archaon

    Archaon Well-Known Member

    Joined:
    20th Mar, 2017
    Posts:
    1,849
    Location:
    Newcastle
    Make sure you do pest and building inspection.

    Make sure you get a good property lawyer/conveyancer.

    Make sure you get title insurance.

    Are you going through a broker for pre-approval or straight to the bank?
     
    duinnsleibhe likes this.
  17. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    I hope that I can see some more in the area that I am looking at, but so far is slim pickings in my price bracket.

    Fingers crossed for me then

    Yes, this is what needles me. I worry that my opportunity to move will be thwarted by worried lenders and that I won't be considered a safe applicant for credit. Such a delicate line to tread at the moment I am feeling - of course I only have my limited understanding to go off, hence why I am asking all of you good people for your thoughts. Thank you all for being so generous.
     
  18. duinnsleibhe

    duinnsleibhe Member

    Joined:
    2nd Apr, 2020
    Posts:
    17
    Location:
    Gloucester, NSW
    Will do.

    Any tips on finding one of those?

    Have not heard of that. May I ask what it is? Feeling very green.

    Straight to the bank so far. Have pre approval so long as mortgage insurance is not required, so up to 80% of purchase price.
     
  19. Archaon

    Archaon Well-Known Member

    Joined:
    20th Mar, 2017
    Posts:
    1,849
    Location:
    Newcastle
    I could recommend someone, alot is done online these days with PEXA etc so it should be fine long distance.

    best give it a google, basically buying a house is Caveat Emptor, or buyer beware, once you sign the contract and buy they house, you basically have all the issues, if you get title insurance and something that comes up that fits the bill.
    i.e; you do your due dilligence and dont find any issues, but it turns out your shed wasn't built to code and council come out and ask you to modify or pull it down, could cost alot of money you don't have, so the insurance covers it.

    Did the bank do a full credit check pre-approval?
     
  20. KingBendtner

    KingBendtner Well-Known Member

    Joined:
    9th Oct, 2015
    Posts:
    82
    Location:
    Melbourne
    Hi mate,
    Congrats on being pre-approved.
    The best time to invest in property is when your budget and finance allows it.
    If you decide to proceed, you are in the box seat. (buyer's market, I think)
    Do your due diligence and negotiate hard.
    If I may suggest, always put an offer with finance condition, just to make sure you're covered in case anything changed..
    Also yes, delay a longer settlement e.g. 45 or 60 days if possible
     
    wylie and Archaon like this.