Preapproval assessment timeline

I see this as a significant risk. A pre-approval without credit oversight isn't really a pre-approval, just the bankers opinion within a few safety margins.

I know that most would ultimately be approved and funded anyway, but I can give you plenty of examples where someone came to me stating that the bank gave them a pre-approval, then later reneged on that pre-approval. Usually about a week or two prior to settlement. People have lost their deposits over this.

The CBA takes several shortcuts like this. Fast service is wonderful, but it's intended to take people out of the market. It does occasionally cause some very serious problems.

 

Peter not often that we disagree. But in this case we do.
Difference is this isn't just a pre-approval on a bit of paper, then when contract comes needs to get assessed by credit.
Just to be clear I'm not just talking pre-approval, the loan I input this morning is approved, documents printed, will be signed and sent off for certification and refinancing with OFI.
Similarly the application I'm working on now it's a purchase, if it didn't involve 2 securities that I was ensuring no x-coll, then I could have approved, printed, signed and be ready for settlement 3-4 days after documents signed.

I would bet these approvals being pulled that you example aren't from CBA bankers.
As they would have resulted in a 'bank committed loan' and likely proceeded with big trouble for the banker.

This so called 'shortcut' is because CBA bankers only do CBA loans, day in day out.
They should know the policy far better than any broker, as they don't have any other lenders on their panel.

Again this isn't for every loan, right now casual, self-employed, comm/bonus still need sign off. Albeit 1-2 day turnaround.

 

Its possible, but since it has been lodged already you might as well keep it going. But you might be able to apply with another lender at the same time if time is of the essence.

 

That's the question, is time of the essence?
All well and good if CBA can approve within a faster time frame but rarely is that the sole priority for basing lender and product recommendation... unless of course that's all you have got to offer...

 

Hi, just thought I’d give you the perspective as a customer as I’ve used both CBA banker and broker for loan application. We too work in health care industry and basically got our pre-approval (90% LVR > $2m for IP) loan approved through CBA in 48 hours after submitting all required docs. This happened mid/late March which was probably at the height of the pandemic. On the other hand we also consulted a broker who told us that it would probably take 2-4 weeks to hear back about our pre-approval and not convinced that we could even get the amount we wanted.

At the end we went with CBA through the banker. However I will probably consult a broker if I were to refinance/restructure our loans

 

Thank you for your insight.
It's not that we are in a hurry of purchasing but the peace of mind you get when you know that you've already have the preapproval letter from a lender so shopping around for a land can commence. I am sure that our situation is not complicated as we are not refinancing so I don't see any reason why Westpac takes long to assess. A bit frustrated with our broker because he insisted that time frame for westpac is the same and that they're platinum brokers so waiting time will not be that long. If only I knew, we should've gone personally to CBA banker.

 

Nah, you'll be better off with Westpac in the long run, product wise, and if your broker is platinum with them then timing won't be bad, same as if they went with CBA actually but Westpac product will be better no doubt. Don't be sucked in by a flashy "processing time frame" at the expense of a better product.
Trust your broker, they're looking after you.

 

Curious- how is the westpac loan better?

 

Fingers crossed @Lindsay_W .

 

Also keen to hear thoughts on this

 

"Westpac product will be better no doubt."

Please enlighten us on this as I'm also keen to know.

 

That's fine @Rolf Latham a lot possibilities in the comparisons.
Any of these actually fit you @Liza28?

@Rolf Latham does WBC allow IO at origination for construction?

 

Rolf beat me to it If you're still unsure, ask your broker why they recommended Westpac over CBA
Don't get me wrong there are plenty of reasons to use CBA especially around their exceptions, back to back for non-exception policy type scenarios the Westpac slightly edges over CBA.

 

WBC certainly does, most lenders insist on it actually.

 

Not talking IO during construction, that expected.
As in after the loan if fully drawn down, fully established.
Can the original loan be setup to start IO soon as build completed?

 

Sure can, needs to be applied for at the beginning, eg. you apply for 5 year IO, it will be IO during Construction and IO once construction completed for the remaining IO term, pretty standard really.

 

I can't think of a lender that wouldn't do this (assuming it's for investment purposes).

 

Thank you so much guys for all your inputs. So much help.