Use guarantor support, go alone or both?

It's funny you mention a branch fudging things up..... I heard from a real estate agent that they had a signed contract with a 21 days finance clause....Buyer lodged the deal with one of the big 4 banks.

21 days comes round....bank says they need another 14 days!.....

Another 14 days passes (35 days from signing the contract!) and the bank finally has the balls to call and say "Sorry, we lost your application."

 

@tobe direct through bank isn't the same process as broker.

Most applications done direct are approved on the spot.
In the case of requiring credit approval (guarantor, company, trust, out of policy, self employed with addbacks) than you're looking at a 1-2 day turn around time for approval.
Once approved most documents can be printed straight away on the spot and sign up with the client (or send electronically for acceptance, pending mortgage)
If manual documents are required to be prepared due to type of application (company, trust, x-coll) than can expect documents within 1-2 days again.
Once signed documents are certified in 2-4 days.


Agreed if the broker has selected CBA unless you have an issue with their service there shouldn't be a reason for a change. I would assume they ran through an expected timeline of how long each stage would take along with providing updates with any delays.

 

The parents may be well meaning but also signing up to service someone else's debts in the case of default. I wouldn't do it. I'd rather gift or loan the kid some money.

 

Not the case at all.
Mate of mine is a lending manager at a CBA branch, was speaking to him just last night.

Client came in with a very short settlement on Friday evening, loan docs certified by Tuesday.

 

CBA used to be able to print docs and have the customer sign them in branch before approval. Great marketing technique, but ackward to explain if anything went wrong. Not sure if they still do that.

Regardless of the branch process, if the op chose to use a a broker for specific reasons, and they have met those expectations, then it's not very cool to drop into the branch and do it rather than get a finance extension if required.

 

CBA have a new system where they allow the broker to print the docs for the client. They make the broker sign an agreement that the broker will be liable for any **** ups for errors in printing and late settlements

 

Never heard of that. We print documents once the loan is approved, which is usually the same day it's input. No marketing technique.

 

it was probably phased out a long time ago, maybe pre gfc. Mobile lenders perhaps were able to review, use their dla to approve and print docs on the spot?

Not sure how it worked but I did have a couple of clients many years ago who were with me because credit reviewed their file after signing docs and declined them.

 

I was around pre-GFC and I was always able print documents straight away, once the loan was approved.

Only time anything is picked up after could be from auditors, but if they have signed documents can usually still proceed as a 'committed' deal.

 

So the house settled on Monday. 43K loan off my parents property and the rest on mine.
Now I have to work out the best way to move forward to get the next one. Will having the 2nd loan stop me from getting another loan for my 2nd investment property?
Do I have to pay off the 43K and then save up for another deposit?

 

Do your parents have a registered mortgage?

Even if they don't you would still need to declare the loan to subsequent lenders.

 

Yes they do also have a mortgage. Do you know if this is going to slow me down?
I'd prefer to not pay it off and just save to get the 2nd one. Maybe wait for it to go up in value enough and get it refinanced out? Is that an option?

 

Yes it is a debt and a mortgage so will slow you down. But it has probably sped things up so far. Do they charge you interest?

You could wait for an increase in value and then refinance the parents loan out. And then borrow off them again.

 

Its a 2nd mortgage through CBA at 4.5% for the 43k.
So you mean refinance them out of the 1st one and use them again on the 2nd investment?

 

So they haven't lent you money but allowed their property to be used as security and you have the $43k loan with CBA?

If so you haven't borrowed from parents.

 

Yes that is correct. Used thier property as security guarantor.

 

In that case it is not a loan from them but you have borrowed from the bank using their property. If your property value increases you could release their security and do it again on another proerty potentially.

I don't think you would be allowed to do a second property using their security when you are currently already doing it.

 

Some lenders will allow a second guarantor or more - however in this current time with lending I'm hesitant to rely on it as lenders are finding any and all reasons to reject investment deals which aren't very vanilla.