The computer says no to us but we know we can afford more. I have heard of borrowers writing up a financial proposal or resume and showing the bank how they can afford more properties to get the loans through. We tried this and the lenders looked at us like we were mad. It made no difference. So I was wondering if anyone has done this and if it worked?
Anyone used a financial proposal to borrow more?
- Thread starter Delilah
- Start date
It doesn't work in residential-loan land. It works in commercial lending where the bank can take into account your trading history, cashflow forecasts etc. BTW, commercial lending isn't strictly limited to commercial properties. It can also be used for residential securities.
Hi Delilah
In most cases you do not have to pretty the proposal up for a lender.
It either works or it doesnt.
Useful mitigants can help, but cashflow projections and "war and peace" business plans wont get to credit ( its hard enough to get them to read 3 sentences many times)
Where most people FAIL badly is not in the presentation per se, but in the logical assumptions they make when seeking finance in the first place.
Just one killer assumption is that all lenders are pretty much the same and the primary difference is in the interest rate, and a tweak or 2 in the product.
In isolation, there is a weak element of truth in that, but when a systemised and knowledge based approach is used to plan and structure lending for a portfolio that is to be added to quickly, lenders are HUGELY different in how they treat things.
A structured and systematic lending approach of using the right lender at the right time of the acquisition cycle, with the right lvr and use the right mortgage insurer for that stage will work.
Almost always when we have inherited either DYI borrowers from bank staff or poorly trained brokers, its because they have become STUCK with what has been cobbled together. Often it can be fixed easily and quickly , sometimes it will take a couple of years to sort..........and sometimes its beyond repair and you need to sit out to the next cycle, or sell down some stock and start afresh
ta
rolf
In most cases you do not have to pretty the proposal up for a lender.
It either works or it doesnt.
Useful mitigants can help, but cashflow projections and "war and peace" business plans wont get to credit ( its hard enough to get them to read 3 sentences many times)
Where most people FAIL badly is not in the presentation per se, but in the logical assumptions they make when seeking finance in the first place.
Just one killer assumption is that all lenders are pretty much the same and the primary difference is in the interest rate, and a tweak or 2 in the product.
In isolation, there is a weak element of truth in that, but when a systemised and knowledge based approach is used to plan and structure lending for a portfolio that is to be added to quickly, lenders are HUGELY different in how they treat things.
A structured and systematic lending approach of using the right lender at the right time of the acquisition cycle, with the right lvr and use the right mortgage insurer for that stage will work.
Almost always when we have inherited either DYI borrowers from bank staff or poorly trained brokers, its because they have become STUCK with what has been cobbled together. Often it can be fixed easily and quickly , sometimes it will take a couple of years to sort..........and sometimes its beyond repair and you need to sit out to the next cycle, or sell down some stock and start afresh
ta
rolf
Who's computer?
If you're going by the online affordability calculator, they're not even remotely accurate for investors.
There are alternatives to the big 4 which also have significantly different results in their policies and calculations. My general experience is if you've run your numbers, factored in a buffer and it still works, then there's probably a way to get it done.
Dont take it the wrong way, but its possible that this is your issue right there.
Obviously I know NIX about your circumstances and its possible that no one will lend to for whatever reason but in general the below holds true.
Unless you sit down with someone that can help u with a global view of where you are and where u want to go, you are looking to fix a symptom, rather than what is causing the symptom.
ta'rolf
What Rolf is also suggesting here is that by talking to multiple lenders, you may have trashed your credit report, which will make it increasingly difficult for you to borrow money, even if you would otherwise qualify.
...and what I think rolf and pt are BOTH suggesting without spruiking is that a good broker might have gotten you a better outcome without trashing credit ratings. Polite aren't they
Yep.... I'm not going to be a polite as PT, Rolf and Aaron...
Go and see a professional broker who will take the time to prepare your financial position and establish the following..
1: If you're even remotely qualified for the amount you're requesting.
2: If yes to point 1, then they'll set out exactly how and more importantly which institutions they will speak with on your behalf. Clearly the DIY option (or FIY as some others like to call it) hasn't worked and you need some professional guidance.
This is of course hoping that you haven't tarnished your credit file with multiple hit's in a short space of time.
All may not be lost so go and speak with the right person and you never know you're luck..
B.D
Go and see a professional broker who will take the time to prepare your financial position and establish the following..
1: If you're even remotely qualified for the amount you're requesting.
2: If yes to point 1, then they'll set out exactly how and more importantly which institutions they will speak with on your behalf. Clearly the DIY option (or FIY as some others like to call it) hasn't worked and you need some professional guidance.
This is of course hoping that you haven't tarnished your credit file with multiple hit's in a short space of time.
All may not be lost so go and speak with the right person and you never know you're luck..
B.D
