Turnaround time for CBA

How quickly Commonwealthbank is approving home loan application these days? I went directly to bank today after being declined by another bank, and the manager said he will have information by Wednesday. Is that time frame realistic, or am I better terminating my contract based on finance clause?

 

This Wednesday? Seems really quick given current timelines are 10 to 12 business days for unconditional approval depending on complexity.

Why was the loan declined by the other lender?

 

The CoS contained buy back clause that said if the build did not commenced by 18 months from date of sale, the developer will buy back with 90% of sale price. Bank said either have it removed or provide fixed price building contract. That was it. Loan servicing wasn’t an issue nor was LVR.

 

Why do you think CBA will approve?

 

Solely because of the buy back clause.

 

I told Bank manager that my loan was declined by another lender stating that buy back clause, hence what is Commonwealth Bank’s stand in regards to this. He replied he had passed several loans for land and construction in the same estate that too on higher LVR. My all banking transaction is with Commonwealth; they have all information about my income and expenses. Also, I know few people who have used CBA for same purpose as mine. I guess that’s why I took a punt. I mean I can exercise my finance clause if I don’t hear from them in time.

 

What is the LVR?

Had a similar one where client had gone to another big 4, and similar issue raised. CBA weren't ok with it either.

 

He didn’t say unconditional approval but he could confirm if CBA will consider my application based on my circumstances, and if they are positive I could apply for extension.

 

Was buy back clause an issue there as well? LVR is 80%. Could go lower if needed.

 

That's good. That other deal was an LMI deal.

 

CBA approved my loan on Wednesday. I went to the bank on Thursday and signed the documents. I wasn’t expecting that quick.

 

CBA bankers can approve loans on the spot for PAYG income applicants.

 

Yes and many things like that clause get overlooked in CBA branch land. Thats why CBA is the only major bank to have credit growth over the last 2 -3 years. Approvals issued by sales people. What could go wrong. Oh wait a pandemic .

ps not saying your loan is risky per se just that most lenders would want more information about the contract clause and quite possibly other things too

 

Before my loan application was declined by another lender, my broker used to say that our case would be one of the easiest for him. It ticked all the boxes every lender want to see in a borrower’s file until that buy-back clause struck .