Can you be too much of a tightar$e?

Rob Williams

Rob Williams

I've got a loan application in with a bank. I won't name them, but it starts with A and ends with Z.
It's not been rejected, as such, but it's not progressing through the queue, either. Seems it's lost traction.
Follow up enquiries have revealed that the loan officer has issues with my living expenses (in particular my outgoing rent) and doesn't believe someone can live as cheaply as I can.
My "cost model" is a deliberate part of my investment strategy. I've trimmed expenses to the bone to enable me to grow my portfolio as quickly as I can.
I've lived in a plywood box in the Himalayas for a month, eating nothing but rice and noodles. After that, anything with 4 walls and roof is a luxury. Any food not cooked on buring Yak dung is a epicurian delight.
How dare they tell me that how I live doesn't meet their lending criteria!
Then again, maybe it's just one small minded loan officer with no prospects and no IP's who's jealous of what I've acheived and the lengths to which I'm prepared to go to achieve my goals.
Rant over. Feel better already!
 
Rob Williams said:
Follow up enquiries have revealed that the loan officer has issues with my living expenses (in particular my outgoing rent) and doesn't believe someone can live as cheaply as I can.
My "cost model" is a deliberate part of my investment strategy. I've trimmed expenses to the bone to enable me to grow my portfolio as quickly as I can.
Click to expand...

As part of a loan application I provided information on incomes and outgoings.

Although my spending is significantly below average the bank praised me on the realistic numbers there (not too low). I quizzed them about this and the bank said that people often understate their expenditure, presumably to make their application look good.

At least with rent you pay it shouldn't be too hard to substantiate this as true. Although if I was the lending officer I'd be checking on market rent for a property similar to that which you inhabit and calculating on that to be assured that you're not paying below-market rent with a risk of it rising greatly when next reviewed.
 
I can't see that it would be too hard to substantiate with rental statements. I'm not familiar of A_Z's policies but I'm sure there are banks who use certain figures for "living expenses" per person regardless of evidence to the contrary. I'm sure one of the brokers can tell us if this is one of them.
Rob, have you given them your bank statements for the last few months? It should be obvious how much $ is going out.
 
Rob

Welcome to the wonderful world of the Henderson Poverty Index sorry whilst the loans office might enter a different figure credit will enter straight from their own LE scale.
 
Living costs and rental costs are 2 diff things

If you live costs are below HPI ( single person 950 or so per month) then the bank wont buy it .

If you rental costs are say 110 week or less and you can substantiate it then go for it.

ANZ isnt known for its flexible approach to credit !

ta
rolf
 
Rolf Latham said:
ANZ isnt known for its flexible approach to credit !
Click to expand...

Seems that way. They haven't even asked for evidence of my outgoing rental. It's like they don't want to see it, they just want to use it as an excuse to stall the application.
I lodged another application with another lender and got conditional approval within 48 hours. ANZ have lost themselves a good client. Not that they care too much.
Thanks for your input!
 
Hey Rob,

I use the genworth calculator (too large to upload - 167kb) but I will send it to your email.

Living costs for a single adult - $13092 PA

I don't know if the banks use this but i'm sure genworth would to calculate their LMI.

With the Servicing Calculator you can automatically calculate:
- Net disposable income (NDI)
- Debt service ratio (DSR)
- NDI ratio (commitments to net income)


Ash
 
Years ago, before I knew about SS and still believed what I was told by the banks, I was knocked back on finance on a "bluddy good buy". Still crabby about it!

Thinking back it probably was because our "low" living expenses didn't fit their model. Our "breeding" had finished 20 years before and a "trip to the vet" ensured that it was not about to restart. Mrs Fish cooks and sews, I can fix anything which is repairable around the house.

The big thing I did not fix though was the monthly repayment on my Lady's car. Not long to go and more than enough cash in the bank to pay it out, it still showed as a monthly outgoing. I don't trade a car as soon as it's out of lease (I still own it) but that is probably what the model says is usual. :(
 
Hey Sparky! Good to hear from you.
Homeside. Something to do with NAB, apparently. I was 14 days from settlement day with no approval. All good, now if they keep up the momentum.
 
Sunfish said:
Years ago, before I knew about SS and still believed what I was told by the banks, I was knocked back on finance on a "bluddy good buy". Still crabby about it!

Thinking back it probably was because our "low" living expenses didn't fit their model. Our "breeding" had finished 20 years before and a "trip to the vet" ensured that it was not about to restart. Mrs Fish cooks and sews, I can fix anything which is repairable around the house.

The big thing I did not fix though was the monthly repayment on my Lady's car. Not long to go and more than enough cash in the bank to pay it out, it still showed as a monthly outgoing. I don't trade a car as soon as it's out of lease (I still own it) but that is probably what the model says is usual. :(
Click to expand...

I drive a 14 year old Volvo Station Wagon that I purchased brand new. Before that I had a 1982 Ford Falcon panel van that I purchased from the gas and Fuel in 1987 second hand and had duel fuel/LPG and run on the sniff of an oily rag. The wife got upset in late 1994 when it rained and the water sloshing at her feet because of a leak where the widscreen met the chasis.Drilling a hole into the floor just didn't do it for her.

When we bought the new car she made me trade the old one in. The broker believed me when I said I wouldn't be trading up in 4 years:eek:
 
Rob Williams said:
Hey Sparky! Good to hear from you.
Homeside. Something to do with NAB, apparently. I was 14 days from settlement day with no approval. All good, now if they keep up the momentum.
Click to expand...

Yeah Homeside NAB usually broker recommended.
Have heard they have been outsourcing everything lately, overseas
About 50 lost there jobs at Sevenhills West Sydney recently.
 
Sunfish said:
Years ago, before I knew about SS and still believed what I was told by the banks, I was knocked back on finance on a "bluddy good buy". Still crabby about it!

Thinking back it probably was because our "low" living expenses didn't fit their model. Our "breeding" had finished 20 years before and a "trip to the vet" ensured that it was not about to restart. Mrs Fish cooks and sews, I can fix anything which is repairable around the house.

The big thing I did not fix though was the monthly repayment on my Lady's car. Not long to go and more than enough cash in the bank to pay it out, it still showed as a monthly outgoing. I don't trade a car as soon as it's out of lease (I still own it) but that is probably what the model says is usual. :(
Click to expand...


Funny !!!
I had a good belly laugh
 
Glad you worked it out Rob. Remember sometimes it also helps when you know people, so if it comes to CBA loans - let me know if I can help you out at Norwood with my people.

Hope the reno's are going well too.

PS Completely off topic - but got a question about Trinity Gardens Primary around the corner from your units (think that's the name of the school). I'm either losing my mind, or spot on - maybe you can answer?

I remember them contructing a new building next to their oval adjacent to Portrush Rd. I swear it was up for a few months, then was completely demolished and it's just the foundation there now. Am I right about this, or am I losing it? Do you know anything about it?
 
Thanks Steve. I'll keep that in mind.
Not sure what the deal is with the school. I never noticed, then I usually approach from Glynburn.
It's refi settlement day, so I should see some $$$$ in my account to cover the deposit, transfer costs and reno on the new place. It's been a stressful month pulling money out of thin in in the current environment.
 
Always happens that way does'nt it! The deals are on the table for months, but the last couple weeks always seem to be a mad dash due to banks, vendors etc. :rolleyes:
 
Holy schizenhowzen Rob, for a guy with allotta moula you live like a pauper!... :p

I know how you feel though, always looking for the next deal and putting the life of luxury off until tomorrow, as long as you enjoy your journey then thats all that matters and I trust you are.
 
Qlds007 said:
Rob

Welcome to the wonderful world of the Henderson Poverty Index sorry whilst the loans office might enter a different figure credit will enter straight from their own LE scale.
Click to expand...

Now, sometimes I'm just too pragmatic for my own good, but it seems to me that if they are just gunna use their own scale to assess your living expenses, why bother asking you to fill in figures relating to it at all?

They should, based on this, just ask for your income and any loans and credit card limits, with statements to verify, and then bugger off and work out the loan amount they'll give you.

Typical Bank d!ckwads.

The thing that really gets me with this mentality, is they assume everyone is a penguin, and lives like all the other penguins.
 
Last edited:
steveadl said:
Glad you worked it out Rob. Remember sometimes it also helps when you know people, so if it comes to CBA loans - let me know if I can help you out at Norwood with my people.

Hope the reno's are going well too.

PS Completely off topic - but got a question about Trinity Gardens Primary around the corner from your units (think that's the name of the school). I'm either losing my mind, or spot on - maybe you can answer?

I remember them contructing a new building next to their oval adjacent to Portrush Rd. I swear it was up for a few months, then was completely demolished and it's just the foundation there now. Am I right about this, or am I losing it? Do you know anything about it?
Click to expand...

That was the school gym, it was destroyed in a deliberately lit fire. It is now being re-built.
 
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