Maquarie Refinance Loan Rejection

[Crane]

I was recently rejected refinance on an existing investment propety with Macquarie which was quite unexpected. I got my application in before they decided not to accept any more residential application, waited over 3 weeks for conditional approval, heard nothing and then told that the application had been rejected based on the property having an unlevel floor. I am really disappointed as we now have been told that goes on our credit rating (which until now has been perfect). We had over $100,000 in equity in the property.
I am interesed to know if anyone else has had a similar experience with them or any ideas on where to go now?

 

[s_t]

"rejected based on the property having an unlevel floor"

for a refinance?? yeah right

 

[Sunfish]

Are you refinancing at the expiry of a fixed rate loan?

It crossed my mind tonight, while discussing this type of event, that such an expiry does in fact necessitate a new loan being written. The bank would then, quite reasonably, require a new valuation if they thought that the value may have dropped. ie Your security is marked to market, not historical price.

Does this sound like a margin loan? Does to me. There is no free lunch and I see this as a risk of fixing rates.

I may be wrong. Don't claim expertise. LOL

 

[Crane]

Hi Sunfish,
Thankyou for your reply.
I am just refinancing an exisiting loan, it is not at the expiry of a fixed rate loan.
A valuation was only just completed about 8 weeks ago from the existing lender and Macquaire accepted this valuation on this property a few days ago only to have now stated that the property has an 'unlevel floor' and is not an acceptable risk for refinancing.
I am confused.

 

[Sunfish]

This link was posted here or on some other forum today. May explain why the reluctance:

http://www.abc.net.au/lateline/business/items/200803/s2189073.htm

 

[Rolf Latham]

Hiya Crane

Go back to your broker..................unless you have a no or lo doc loan combined with a HDT there are a number of other options available still.


Your Credit file will onl show that you applied for x amount...........it wont show anyhting other than that, and its not really a problem unless your CRAA is already very bizzy.

ta
rolf

 

[s_t]

Are you refinancing at the expiry of a fixed rate loan?

It crossed my mind tonight, while discussing this type of event, that such an expiry does in fact necessitate a new loan being written. The bank would then, quite reasonably, require a new valuation if they thought that the value may have dropped. ie Your security is marked to market, not historical price.

Does this sound like a margin loan? Does to me. There is no free lunch and I see this as a risk of fixing rates.

I may be wrong. Don't claim expertise. LOL

I checked my contract last night, and that isn't the case with mine. It was clearly just a fixed rate period within the loan contract that reverted to the variable rate when it was over. All clearly the same loan with no refinancing needed.

 

[Spectre]

I'd pull the pin with Macquarie and go somewhere else. It sounds more like they were winding down and looking for a reason to get out of it.

My past experiences are their valuation policy - when theres an issue with it - stinks. Its easier to go to another lender as the mortgage insurer wont budge. Even when you can prove the valuer was wrong as they think you then manipulated the valuation somehow.

 

[dean lynch]

Hi Crane,

I would love to get some more details and help you find the right lender before you resubmit. Macquarie has gone through a lot of change and they may have affected your application and their willingness to accept it. I would be surprised if this was the only reason you were rejected as there are many properties out there that have uneven floors and are still used as security. Some lenders will value your property before you do an application and I would be happy to help you arrange this so that you get the right lender next time.

Cheers,
Dean Lynch
Principle Mortgage Consultant
Australian Mortgage Brokers
E: [email protected]
W: www.deanlynch.com.au

 

[asdf]

Hmmm, I wonder if I should empty my LOC from MBL now before they freeze those too like some lenders in the US....

 

[alexlee]

I checked my contract last night, and that isn't the case with mine. It was clearly just a fixed rate period within the loan contract that reverted to the variable rate when it was over. All clearly the same loan with no refinancing needed.

That was my understanding too. In the same way, when an interest only period expires, if I do nothing, the loan payments just change to P&I on the same loan without a new loan having to be written.

Can any MBs confirm?
Alex

 

[Crane]

Thankyou everyone for the replies.
Also thankyou lukentel, I will be in touch.
Funnily enough, the valuation which was done by the lender who the property is currently mortgaged to and does not mention unlevel floors
It seems that Macquarie just did not want to finance the property.

 

[Spectre]

Alex

that sounds right but you should be able to refix/io it....

suppose it depends what the rollover rate is... full doc, low doc, no doc etc.

Bearing in mind last I checked Macq's fixeds were higher. Even the guys who worked for macquarie (resi mortgages) would tell me not to fix with them... seems they really only wanted the variable side of things.

 

[knightm]

I was recently rejected refinance on an existing investment propety with Macquarie which was quite unexpected. I got my application in before they decided not to accept any more residential application, waited over 3 weeks for conditional approval, heard nothing and then told that the application had been rejected based on the property having an unlevel floor. I am really disappointed as we now have been told that goes on our credit rating (which until now has been perfect). We had over $100,000 in equity in the property.
I am interesed to know if anyone else has had a similar experience with them or any ideas on where to go now?

YES -THIS HAPPENED TO ME TOO!

I successfully refi ed an IP with Macquarie in Dec last year, no probs. Then got pre approved for a 200k loan and went shopping in January. PRoceeded fine until valuation, which also came back fine, then loan got rejected a week after the val came back ok with a BS reason that they found some old record in my credit history of getting loans as a full doc employee - this one (and the recent refi) were low doc. They said they couldnt approve the low doc as the mortgage insurer (they had been talking apparently) now didn't believe I had genuinely been in business for more than 2 years (as the previous note on credit history was about 12 months old) and rejected the loan!!!

Everyone I shared the story with including my solicitor rekoned they were looking for reasons to nock back loans in the sub prime climate, then a few weeks later they can the whole operation!!! At least I wont take it personally now, still cranky that I have a stain on the credit rating now.

Got a loan with colonial btw, property settled after much scrambling and stress.

 

[Bradsdad]

G'day Crane,

Did you pay for the valuation? If so ask for a copy from the lender (they probably won't give you a copy but you can try). Valuations usually have 2 areas of "risk" broken into 8 categories (4 in each). The gradings are 1=low, 2=low to medium, 3 = medium, 4 = medium to high & 5 = high. Lenders will usually only be concerned if any of these areas come in at a 4 or 5. If your valuation had areas for concern then the lender may refuse it.
You mention that the existing lender did a valuation about 8 weeks ago. Can they support Macquaries' claim that there is an issue with the valuation?

As you had the existing lender conduct a valuation, am I to assume you approached them for extra funds and they ended up saying "no" hence you turning to Macquarie or maybe you were hoping for a higher valuation to access more funds through Macquarie?
If you're now looking at an alternative lender and the valuation was "the issue" then best you ensure the new lender being approached doesn't use the same panel valuers otherwise you may strike the same problem. You would then be left cahsing another lender and have 3 recent credit enquiries against you (assuming existing lender did 1 also). Once you get a few enquiries in a short space some lenders get nervous that the client maybe altering each application to make it "look better".

Anyway, good luck with your quest and I hope things improve. Should you wish to have a quick chat please feel free to message me.


Regards
Steve

 

[alexlee]

Alex

that sounds right but you should be able to refix/io it....

suppose it depends what the rollover rate is... full doc, low doc, no doc etc.

Bearing in mind last I checked Macq's fixeds were higher. Even the guys who worked for macquarie (resi mortgages) would tell me not to fix with them... seems they really only wanted the variable side of things.

Are you refinancing at the expiry of a fixed rate loan?

It crossed my mind tonight, while discussing this type of event, that such an expiry does in fact necessitate a new loan being written. The bank would then, quite reasonably, require a new valuation if they thought that the value may have dropped. ie Your security is marked to market, not historical price.

Does this sound like a margin loan? Does to me. There is no free lunch and I see this as a risk of fixing rates.

I may be wrong. Don't claim expertise. LOL

What I mean is, if I DON'T need a refix, re-io, etc, then the loan just changes to whatever the loan doc says.

Sunfish, maybe property loans aren't as risky than you think.
Alex

 

[Spectre]

Probably a case of making a decision as to what their rate is vs other lenders offering similar.

 

[GMG]

My observations

I found it odd last year, that so many experts were pushing Macbank's products.
It was suggested to me to leave my bank, and to refinance every loan with Macbank. This did not sit right with me, I decided to stay with my bank.

Another advice was to roll my super into Macbank's super wrap. After I changed my mind about it, my super was still rolled into M bank's wrap.
I kicked up a huge stink, and my super is now elsewhere.

And lastly, I was continually being swamped with M bank's managed funds offers. I went against my instincts there, and invested in one of them. I am now in the process of getting out.

So, moral of the story was for me: Gee, M'bank must be paying some hefty commissions to many "experts". It was more than just a coincidence for me.

Good luck with refinancing. I wish you a good outcome, Crane.
I wil have to refinance with my bank in 3 years time, when my IO loan runs out.
I was also under the impression that once the IO loan finishes, then it turns into the P&I repayment structure. However, I am not sure about this, and especially how it works with fixed interest rate.

I hope some of the MBs here can answer this.

Cheers,
GMG.