Changing lenders after preapproval?

[klassen]

So we've got a preapproval from St George for $700k.
We have $200k saved already and have just made an offer for a place of $620k which has been verbally accepted.

We pay our 0.25% holding deposit and arrange a building and pest, strata report, solicitor has given an okay on conditions of the contract.
We'll negotiate subject to clauses with our 0.25% offer.

Thing is we submit applications for formal approval as well.
Say we want to apply for formal approval with a different lender due to better loan structure, or whatever the reason.
Is this a difficult process?

My broker recommended applying for preapproval with St George at the time (Mid July) so as get an idea of maximum lend capacity, etc.
Did not really talk about loan structure and all that stuff earlier.


Regards

 

[Aaron_C]

Of course you can pick whichever lender you want...

 

[klassen]

Ok thanks.

Sorry, first home purchase and all.

 

[Peter_Tersteeg]

A pre-approval is there to give you assurances that you can borrow the money, it's not a commitment to use that lender and if there is a more suitable offering available later then you should take it.

At pre-approval time we put some basic structuring parameters in place such as interest only loans, as this is fundamental to meeting the needs of the borrower. We don't decide on the detail of things like fixed rate splits until the full approval is required, simply because these parameters are highly likely to change.

In most cases we stick with the lender with whom the pre-approval was sought because the reasons for that recommendation are still there. On occasion however, another lender will offer something better in the meantime. In that case we put in a new application to that lender, but keep the pre-approval open with the first lender as a backup.

Incidentally unless your pre-approval has expired, you usually don't have to submit another application to take it to a full approval. In most cases it's simply a matter of providing a contract of sale plus a rental estimate if it's an IP. If it's within 90 days you shouldn't have to provide new payslips, savings histories and privacy statements.

 

[Aaron_C]

To the OP - this is why I don't bother with preapprovals most of the time. New deals come out all the time which make your preapproval meanibgless.

 

[Jamie M]

So we've got a preapproval from St George for $700k.
We have $200k saved already and have just made an offer for a place of $620k which has been verbally accepted.

We pay our 0.25% holding deposit and arrange a building and pest, strata report, solicitor has given an okay on conditions of the contract.
We'll negotiate subject to clauses with our 0.25% offer.

Thing is we submit applications for formal approval as well.
Say we want to apply for formal approval with a different lender due to better loan structure, or whatever the reason.
Is this a difficult process?

My broker recommended applying for preapproval with St George at the time (Mid July) so as get an idea of maximum lend capacity, etc.
Did not really talk about loan structure and all that stuff earlier.


Regards

Hi klassen

Before jumping to another lender, and if you haven't done so already, have a chat with your broker about the St George option. There could have been a good reason it was placed with them.

If it's pricing that's a concern, St George aren't too bad in this regard - and depending on the loan amount your broker might have some leverage to negotiate on rate.

Switching lenders will also result in another credit file hit. It might not pose a big issue but best to avoid where possible.

Cheers

Jamie