Refinance rejected but banks won't say why

Hi

I was trying to refinance 3 properties. I applied for Virgin Money first, we got conditionally approved then they rejected the loans because of confusion about part time income (broker used Overtime as whole income instead of 80%) and 1 of the home was privately rented for a family member so payment was in cash.

I tried again with Macquarie. The broker (different broker) ran serviceability test and it was okay even with the base salary and market income from the private investment, this was also rejected. They refused to disclose the reason why the application won't go through. We assume it was because of borderline servicing.

We tried one for time with Resimac and the same thing happens. It will service with spare room even with no income from the private rentals and using base salary. We were again, rejected and the bank won't say the reason.

I'm so confused. Credit score very green 800+. My broker suggest that perhaps Virgin flagged my credit file? I called them but they don't disclose information. Contacted the first broker and he said it was a normal application, there's no flagging.

Anyone have any advice or experiences to share? Please help.

 

Thank you for your reply

If there is something about the deal the lender wont disclose for privacy reasons - usually that is something on the credit file, some old default, undisclosed credit, or some concern around fraudulent docs or income etc, how can I find out & if there is a way to fix it.

How long must I wait until those are removed or until I can try refinancing again?

It was a Prime Product.

 

Thank you.

I got equifax reports, there's nothing out of the ordinary there. My concern is probably perhaps they flagged it for fraudulent docs or income? The 1st broker had used my total income 72k while it should only be 52k base income, the rest was overtime income. I also have the private rental income which is very basic because I rent it to a family member so it's cash & can be confusing.

If that is the case then is there anything I can do? How long will a lender flag your file?

 

I have also gotten the d&b. It looked normal just enquiries,etc.

The income is proper cash, cold hard cash.
I declared all the income in the tax return.

 

I see, thank you

 

@Tomodachi, with such a different/unique situation, why didn’t you do your refinance with one of the MB on here?

 

Brokers will always know why a deal is rejected

 

I feel your anxiety on this. I wander if an application was lodged at all? I have had some bad experiences with 2 brokers (none on this forum, one folded and the other one Ive just had a deal go through with but it was disastrous). If there is one thing moving forward, like me, finding a really good broker that can work with your situation is necessary. Do you know if it was even lodged?

 

Any advice? I'm so scared my file is bad forever?

 

I think the application was lodged as there was credit enquiries on my credit files

 

What i would do below:

- Obtain a credit check report yourself to see what they might be looking at
- Ask for what the shortfall/surplus plus was for the proposed refinance (would be handy to know what affordability rates were used)
- Ask for what income was used/how it was treated
- Ask for what the GLEE was recorded as to see if it was bumped up to HEM
- Are your properties located in any High Risk/At Risk post codes that require a lower LVR?
- Do a title search and see if there is anything glaringly obvious (i.e covenants/caveats)
- Who else is involved in the loan? Is their record clean?
- Did those lenders have Debt to Income ratio requirements?

I'm speaking from experience at a Top 4 Bank so i'm not 100% sure what would have went on with those lenders, my guess is that the loans would have been run through a decision tool and triggered an auto decline.. possible suspects may include what i listed above

If the primary (being ability to repay the debt @ affordability rates) and secondary exists (be it having enough equity for the proposed transaction) was met... there is no reason why you should of got declined

In regards to the cold hard dough, If you can provide statements to show the cash coming in and it marrying up to what you lodged like you say, this shouldn't be an issue at all

These kind of scenarios annoy me when you don't get lenders/brokers exhausting all possible options before giving you a no AND telling you why you were declined... pure laziness

 

Find out why it was rejected.

 

Thank you. I'll do those. It's difficult for me because the second broker is blaming the first one.

 

I'm wondering if the rejection has anything to do with lower bank valuation of property/properties.

 

My 2 cents worth..

1) Sounds like it just doesn't service to me. Private rent has probably been excluded.
2) Part time income less than rental income? Considered high risk.
3) Resimac got scared off by the 2 other enquiries.

As an exercise only Id be happy to run servicing on all 3 lenders calcs for you if you send me the other brokers fact find, income docs, summary of all debts etc