Applying for Loan and large yearly expenses

A

ashalim

Hi all,

Was wondering if large yearly expenses would be a bad thing right before applying for a loan.

My situation: Am applying for a loan early March. However, my rego, CTP and pink slip and minor car service is due 21 Feb. This is over $1k in expenses

and also I was planning a holiday for October (been planning for months) and the travel agent requires the air fares and travel insurance to be paid now...so that's another $1500ish...

Would that impact my chance of getting the loan greatly?

Thanks
ASH
 
ashalim said:
Hi all,

Was wondering if large yearly expenses would be a bad thing right before applying for a loan.

My situation: Am applying for a loan early March. However, my rego, CTP and pink slip and minor car service is due 21 Feb. This is over $1k in expenses

and also I was planning a holiday for October (been planning for months) and the travel agent requires the air fares and travel insurance to be paid now...so that's another $1500ish...

Would that impact my chance of getting the loan greatly?

Thanks
ASH
Click to expand...

Hi Ash,

In a nutshell, it does not have an impact of you getting a loan.

When the bank assess your eligibility for a loan, they only look at your income, regular + ongoing expenses and deposit for the property.

So long as you meet all of the criteria, they will approve the deal.

It is borrowers' responsbility to ensure money are set aside to meet the new loan commitments.

In your case, it is probably a good idea to have 2 accounts: 1 for deposit of property and 1 for personal expenses.

Good luck!
 
I've already paid the 10% deposit as it is an OTP purchase. Original pre-approval some months ago shows i'm all good for unconditional but then they had the interest rate increase last Nov :D

Will be contacting a broker at the end of month or early March...need to find out how the developement is going, it's in Melb and they been having lots of rain lately hehe might be delayed.
 
As Marty said, it wont have any affect...."living" expense is taken in consideration as long as you have enough income/rent to service the loan.

If the place is due to settle in march, you should be looking for your approval now.


Regards
Michael
 
Hi Michael,

The developer said April, but I had a friend who went to Melb in January and ask him to take some pictures on the building, in January it's still just wooden frames, the brick veneer was just starting to come up. Not sure how quick they can build 7 townhouses :p

If it's in Sydney I would say they got no chance of finishing it by April hehe. But yes I will be contacting broker next week.
 
ashalim said:
If the property is not close to finishing, lenders would generally not approve the loan application, is this correct?
Click to expand...

Lenders will approve the application, but the application may need to be re-examined if there is a substantial delay between the initial approval and settlement.

From frame stage to completion, some buildings can be errected in a matter of weeks. For other projects it can take years. How close is 'not close'? My preference would be to get an approval, then get it re-approved later. It's not a perfect system, but it does give you some piece of mind.
 
ALWAYS get it approved and re approved later if it expires etc.

Although lenders have loads of back out clauses, taking a formal approval expired by a month to ACA is much more likely to get your head on telly than a pre-approval 18 months old....
 
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