Lease Option Finance

[Diverse]

Hi All,

Hoping someone might be able to shed some light on our situation.....

We are currently 12 months into a 24 month Lease Option, as 'Buyers' and have begun applying for finance, through a mortgage broker, with the intent of exercising the option asap.

Our finance application was submitted early Feb, 2012 and we are continuously being told, by our broker, the lender still hasn't made an approval decision and that these approval types often drag out.

Apart from this being extremely frustrating, we can't help but wonder if this is slightly odd and whether or not we should be applying a little more pressure, to our broker, in being more communicative about our application?

Has anyone been through a similar scenario? Is it normal for a lender to take this long and still not have made a decision?

Any assistance is greatly appreciated!

Cheers

Diverse

 

[Aaron_C]

Did you broker say why they're taking so long? Sometimes the banks can take a long time to process applications. Which bank is it? Right now banks like AMP, Citi etc take a very, very long time to get anything approved.

 

[Diverse]

Thanks Aaron _C,

Lender is Suncorp.

So you're suggesting this time frame as being potentially normal?

Communication from the broker is unfortunately limited, which is contributing to our concerns regarding the delay.

Cheers.

 

[Aaron_C]

Thanks Aaron _C,

Lender is Suncorp.

So you're suggesting this time frame as being potentially normal?

Communication from the broker is unfortunately limited, which is contributing to our concerns regarding the delay.

Cheers.

Well are you waiting for a conditional approval or an unconditional approval?

 

[Peter_Tersteeg]

Conditional or unconditional, this kind of timeframe without an explaination is unacceptable.

It's hard to think of why there'd be a delay this long though. Given there's a lease option involved there could some delays, but not this long.

You really need to get in touch with the broker, even if it means beating down the door. Failing that, contact Suncorp directly.

 

[Diverse]

We're chasing unconditional approval and are of the same opinion as PT_Bear. Surely it shouldn't take this long?

To make things worse, we negotiated a $10k reduction in total purchase price based on an earlier than expected settlement, occuring on or before a recent date, which has now lapsed.
My efforts to obtain our application details, prior to this date, were responded to by suggesting any contact with Suncorp, by us, would potentially jeopardise any chance of approval.

Thoughts on this?

 

[Peter_Tersteeg]

The $10k purchase price reduction is interesting and likely means the property is likely to be valued $10k lower than purchase price (even if you pay the extra $10k). If there's LMI involved I'd strongly recommend against this type of clause in the contract. This might put it outside of Suncorps underwriting authority, it then has to be assessed by the mortgage insurer which is not a good thing in my experience.

I can think of a few additional reasons why the application might be in trouble but that's speculation. In the absence of additional requests for information, by now the application should either be approved or rejected. Even if it's the later and the broker still thinks it can be salvaged, they should have been in touch to discuss options.