Unconditional Loans with Multiple Banks

Given the current health crisis with the cornavirus and the economic impacts of this, would it be prudent and ok to ask multiple banks for unconditional approval?

Our current situation is that we have bought an investment property 2 months ago, with settlement in June this year (5 month settlement). We had pre-approval with a major bank but they advised that they couldn't go unconditional as it needed to be within the 3 month period to settlement. There are 3 months until settlement as of today.

My wife has a safe job in the health/medical sector, however I am self employed (sole trader) and my business has taken a big hit due to the coronavirus issues worldwide. It will be fine long term as I have no debt and no employees, but short term (who knows how long) it will suffer. To get pre approval it was ok to just rely on my previous year's tax return (Jul 18 to Jun 19) and the most recent payslips from my wife. I don't know if this will change for unconditional approval, especially given the economic impact the cornavirus has had.

Also, has anyone heard of or experienced a bank recall on an unconditionally approved loan? I heard instances of this may have happened during the GFC?

If anyone could provide some input on what we could do, I'd be very appreciative.

Thank you and stay safe.

 

Applying to multiple banks will impact your credit report very quickly. You might find that lenders will become more reluctant to touch you.

At this point mainstream lenders haven't started changing how they approve loans and you're only 3 months away from settlement. See a broker now, figure out the most appropriate lender to your circumstances and get the loan approved.

 

Yes I have seen banks reneg on unconditionals.

The issue with being self employed is that any downturn will not show up in financials until after the financial year so you will probably be ok.

 

Thanks Terry, regarding the reneging of loans, who did this mostly happen to and what were the reasons why? Did you see it happen to anyone who provided a 20% deposit?

Thank you!

 

Thanks Peter, we're looking to get an unconditional approval asap so for now we'll go direct with the bank that gave us the pre-approval!

 

last year when at settlement the bank worked out that they made an error. 20% deposit provided.
Eventually got them to reapprove and settle but they refused initially

 

I've seen someone have their loan approval rescinded at the last minute on a 60% loan. Fraud was involved. It was actually a banker that committed the fraud, she lost her job. The borrower didn't get the refinance she wanted.

 

Oh wow...lucky it was just a refinance!

 

Macquarie is now asking for proof of up to date cash flow for both PAYG and self employed borrowers ie they want to see more than old tax returns and 6 week / 2 month old payslips. They are asking for bank statements to confirm income deposits no older than 14 days before formal approval. Others will likely follow.