Calling all Mortgage Brokers

Hi all,

I am hoping that some of the great brains on this forum might converge and offer some insight to my financing dilemma. I have posted about it before and thought I had it all sorted - finally, after months of running a refinancing marathon - until a couple of weeks ago...anyway, this is the low down on how I am getting no joy from banks.

I am trying to buy my 4th IP for 268K (preferably in a trust). I bank with SGB and they have 3 IPs + PPOR all x-coll. I'm trying to refinance the PPOR and use the equity in the properties (not sure which ones yet) as deposit/costs for the new purchase. There is substantial equity, and equity has never been the issue.

I approached a mortgage broker via my accountant and they almost had an approval through with ANZ (not in the trust, but in individual names only). At the last hour, 4pm on a friday night, SGB changed their payout figure by 7K. With this, the mortgage broker asked ANZ to increase the loan by 7K (without talking to us first). At this, the request somehow triggered something in 'head office' and the loan was then automatically declined. There are so many problems here that my head is still spinning. In particular, SGB used a 2008 val on one of the properties and used vals that were over 6mths old on the other two properties. The 7K in equity would have been found, I am very certain. But if not, we would have paid cash for the shortfall. Apparently, there was no turning back once the application was declined by ANZ's head office.

Anyway, I then moved on to Westpac (I am very much regretting that I didn't fight harder to win ANZ over!) and although they were hopeful, they would not approve the loan on the basis that my income cannot be substantiated. By this they mean my present income is different from my taxable income in the previous 2 tax years. Mainly because I was on maternity leave (with twins!) and now I am back at work, 2 days a week in my own private practice. BAS statements have made no difference. Banking transfers from my clinic where I work to my bank account seem to not be enough evidence. July - Dec Profit and Loss are also not enough. I have very detailed accounting and my income is consistent month to month now.

Both banks have encouraged me to come back to them once I do the next tax return! They wish!

My options at this point are to either admit defeat OR push ahead and hope that I can find a non-bank institution to fund this purchase. This has been a endurance marathon and I am mentally exhausted from trying to think through solutions. Perhaps this IP is not meant for our portfolio (but, I'm having trouble accepting this).

I am concerned about the impact on CRAA file. I'm not sure whether 2 denials of finance is a bad thing.

My goal is to not only keep buying property but to get the financial structure in order. The x-coll has made it all very difficult and the banker at SGB will not return calls etc.

If this puchase does not go ahead, I would like to refinance some of the properties away from SGB and to have the equity as available cash but I don't know how to achieve this. We could probably use the cash to buy a cheaper IP or use it to renovate our PPOR.

My questions are:

What would you do? Push ahead or admit defeat and just wait a little longer until the tax return is done.

and

Would you try to pull out the equity and put it elsewhere...?

and

Is there anything that I am missing?


Many many thanks in advance,

Mel
 
Sorry to hear the issues you are having.

Hate to say your Mortgage Broker is incorrect. I have had many a deal declined by Anz (one this week just gone) and with a little push and shove with the assessor direct or thru by BDM have usually managed to get it overturned.

I assume you are self employed so why are ANZ / Dragon asking for BAS when even in Jan of the following year they would normally run off the 2009 Tax returns.

Think i would be getting your MB to push a little harder.
 
I would suggest you attempt to unravel the cross collateralisation with St George. You can stay with them or leave. It may be easier to leave, but you should be able to stay and just request a release of security - tell them you are selling the properties in the near future maybe.

It is very hard doing this and a purchase all at once because of timings and dealing with different lenders etc.

Maybe try changing brokers and trying again for the loans with ANZ too. It doesn't look good to have too many enquiries on your credit report, but it is not the end of the world.

Once you release a property you may be able to access more equity than you had thought and this may help you get over the line with another lender, eg maybe a 60% LVR low doc until you do you next tax returns.,
 
I support Richards comments. I've had some very painful experiences with ANZ lately, but they have sorted themselves out with a bit of effort. Trusts are a no-brainer with them either (assuming it's a full doc).

Their service isn't great I agree, but the deal does get done. If your broker has a good relationship with their BDM, a lot can be done outside of normal procedures.
 
Hi Mel,

I am sorry to hear about your predicament. ANZ should have been pushed harder.

I am also concerned about the impact on your CRAA file as you have had three hits in a short period of time with major banks. St George, ANZ and now Westpac. I am VERY suprised that they attempted Westpac after being knocked back by St George and ANZ.

I would try and wait until you get those BAS statements. You have only got 5 months or so. :)

Regards JO
 
Thanks Guys,

Regarding my MB, he seems knowledgeable and understands the way I work but when he hit the wall with ANZ he just folded and said it's over. Given this was 4pm on a friday night I went into action mode and called on a friend who is a business banker with Westpac to see if I could resurrect things by dealing direct with the bank. I should have persisted with the MB and ANZ, I guess.

In any case, first thing tomorrow, I am going to get in touch with the ANZ mortagage lender that the MB was dealing with. I will be dropping in if need be. I will go through the scenario and hope for a save. I have a back up plan of approaching another non-bank lender that might be able to do a low doc loan...will wait and see. My back-up back-up plan is a joint venture agreement to buy/reno/sell with a friend who is looking to start in property investment and has cash (as per Jan Somers, better to have 50% of something than 100% of nothing).

BTW. Does anyone think this is strange...?
1) That SGB changed their payout figure at the last hour, throwing the whole deal into disarray, and further,
2) that they used a Dec 2008 val on one property and non current vals (3-6 mths old, I think) on the other two properties. These three properties they were keeping and the PPOR was being refinanced to ANZ with the new purchase.

Apart from this, ANZ had asked our lawyer to review all trust documentation and then wouldn't approve the loan in the trust, only individual names. I was willing to accept this stupid request just to get the deal through but now I am considering a complaint to the baking ombudsman. Surely they would formally approve the loan first and then get the legals sorted?

In terms of SGB, how do I ask to release the equity that I have? I assume that if they agree they bring loans to 80% LVR and I pay interest on this increased loan amount and put the cash funds into a separate bank account with another bank. Is this right?

I have to say though, that I am frustrated with the SGB lender who avoids my calls because she believes that what I want to do can't be done.

Please keep the posts coming and I will update you as it all unfolds...

Mel
 
Hi Jo,

Thanks for your input. I know you know the scenario and how frustrated I am given my income is more than sufficient and proven by my last 2 BAS (yes, only 2 to go). I have given them my statements of income etc right up to date and they have seen my own accounting software printouts of all incomings and outgoings! My only way now is to keep trying to source non-bank lenders that will accept my current income rather than relying on the now non-relevant (Mel-on-leave-with-twins-no-sleep-can't-really-work-than-much) tax returns from previous years. I am still researching so it's not over just yet!

Mel
 
Hi Mel,

Unfortuantely 2 BAS statements aren't really sufficient for proving income. They want 2 years tax returns. Having books up to date doesn't really prove anything either as books can be 'adjusted'.

These things can help an application and might be suitable under some circumstances, but on their own they're not enough.
 
BTW. Does anyone think this is strange...?
1) That SGB changed their payout figure at the last hour, throwing the whole deal into disarray, and further,

Mel

The pay out figures can and do change, especially if there are fixed loans involved. Also it may be that it went over too long and they needed to add interest etc - or it could just be a stuff up.

Apart from this, ANZ had asked our lawyer to review all trust documentation and then wouldn't approve the loan in the trust, only individual names. I was willing to accept this stupid request just to get the deal through but now I am considering a complaint to the baking ombudsman. Surely they would formally approve the loan first and then get the legals sorted?

Mel

The can't really approve the loan without checking the trust deed - now they put the onus on your solicitor to save them the hassle and liability if something goes wrong. But this is just a waste of money to the client if the loan is not approved, so it is worth a complaint - try ANZ complaints section first.
 
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