Unconditional Finance + Credit Checks

My question is, once the bank gives you unconditional finance - do they generally do any further credit checks after this point? i.e. if I were to say purchase a new car during the settlement period would that backfire?

Thanks in advance.

 

Usually if it's unconditional all the checks have been completed - but when is settlement, why not just wait - whats more important?

 

If getting a car loan would make such a difference to your finances that you would no longer qualify for a loan, then there is a reasonable argument that you can't afford the car loan.

I don't necessarily agree with that statement 100%, but I'd suggest waiting until the property has settled and you've got a better understanding of your new cash flow before taking on more debt.

 

I should mention that one lender last year did an employment check a week before a settlement, I only found out about this as the client had actually changed jobs.

It was a strong application to begin with, but had it been above 80% or had they changed jobs before the loan was approved, I was told the finance approval would not have been honored.

Lenders can and sometimes do additional checks after approval. Until you've got the money in hand, best to keep things at the status quo.

 

Agree with the above - generally they won't pull the credit report again BUT it doesn't happen.

Had one recently where client had applied for a credit card after approval - on the day of settlement the lender questioned the new card on the credit report! Lucky it didn't have an adverse effect.

Cheers

Jamie

 

Usually don't look at CRAA - especially the bigger lenders who i doubt would do this as thats done at application submission stage.

Smaller lenders more likely to happen, but unlikely.

An employment check is more possible @ settlement and I've seen it happen more than once.

 

Thank you all for your response.

The vehicle purchase would be a company purchase - I'm buying the property jointly with someone else who owns a small company. The vehicle was ordered previously but no contracts signed etc. AND now it turns up so they're expecting things to go ahead. I just wanted to know the consequences of going ahead after cooling off pre-settlement.

We can totally service this purchase. I'm on decent income with my current IP positively geared earning me about $6k a year. This will be my 3rd purchase. First joint. Second IP.

The banks being super cautious - far more nitpicky than before. I'm better off now than when I bought the first two!

So if the company borrows cash from a family member and purchases the vehicle outright would that work?

 

Just check with your lender/broker.

If the application relied on the company income, a new car loan would affect the servicing. For many small companies the company income is ignored with a letter from the accountant saying the company "trades profitably". For many lenders in this case company debts don't need to be disclosed on the application (in personal names) anyway.

 

Yeah it's a newish company - but was a business for 15 odd years. Ok. Making sense. This just all came about this evening and then I had a staff meeting til ridiculous o'clock. So no one else to ask.

I'll call the broker tomorrow.

Need to do a purchase now because I doubt I have a year left in me at this current job/salary. Commute is killing me among other things.

Thank you ☺️

 

Pretty sure you would have a positive obligation to disclose the new credit commitment anyway per your loan contract (the part about changes to circumstances over the short term).

 

Ive heard of ANZ doing just that. Probably when there is a large cash out request!!