NAB won't give unconditional approval

[davidw89]

Hi,

Having been approved conditionally for a loan, with the condition being to provide rental income, payslip and the sales document. Problem is that I have no idea which property I'll be buying yet. So I asked whether they could give me an unconditional pre approval if I provided them with all the documents except the property contract. She said no. That strike me as a bit odd as how can I have the confidence to purchase at an auction if my finance is not 100% approved?

Thinking of going to another broker and trying to get a proper pre approval!

 

[Propertunity]

There are no "proper" pre-approvals. The formal approval will be subject to many things, such as the subject property's valuation, rental income, your payslips, etc etc.

 

[westminster]

You can't get it without those details as they are all part of the reason why the bank will give you money. Each property is unique in value and rental income.

Imagine if you got carried away in an auction and bought a house which was only worth $400k but you paid $550k because you really really wanted it and it could only be rented for $200pw.

It would fail valuation at the bank and it would be all over.

A conditional pre approval is about as good as you'll get I reckon.

 

[D.T.]

Pre-approval is a gimmick

 

[Redom]

Hi,

Having been approved conditionally for a loan, with the condition being to provide rental income, payslip and the sales document. Problem is that I have no idea which property I'll be buying yet. So I asked whether they could give me an unconditional pre approval if I provided them with all the documents except the property contract. She said no. That strike me as a bit odd as how can I have the confidence to purchase at an auction if my finance is not 100% approved?

Thinking of going to another broker and trying to get a proper pre approval!

Heya,

The pre-approval at best can take you to the following conditions:
1) Valuation
2) Evidence of rental income
3) Subject to NABs security policy (ie you don't go buy a block of 12 Units in woop woop).

Given that valuations come in at purchase price 95% of the time, and even more so at auctions - you're just about as 'good to go' as you can be.

You can only go unconditional once you have the property and the above are met.

Not sure why payslips are in there or your expectations on this - you cant go unconditional for any standard loan without showing some form of income verification.

Cheers,
Redom

 

[Peter_Tersteeg]

You won't get an unconditional approval until you've actually purchased a property and can then provide all this. Until then you'll only get a conditional approval.

This is standard procedure.

 

[Sean M]

That would be lovely in the ideal world but yes as the brokers have said you cannot go unconditional until you actually have a contract of sale signed by both parties and the bank has fulfilled its lender responsibilities etc etc.

 

[MC1]

Hi,

Having been approved conditionally for a loan, with the condition being to provide rental income, payslip and the sales document. Problem is that I have no idea which property I'll be buying yet. So I asked whether they could give me an unconditional pre approval if I provided them with all the documents except the property contract. She said no. That strike me as a bit odd as how can I have the confidence to purchase at an auction if my finance is not 100% approved?

Thinking of going to another broker and trying to get a proper pre approval!

A proper broker is going to do exactly what your broker did

 

[Corey Batt]

A proper broker is going to do exactly what your broker did

Bingo.

Not possible to get an uncondtional pre-approval. If you want something so airtight, you're going to need to pay 100% cash.

In reality so long as you think the valuation will stack up and the property of suitable quality you're reasonably protected. If you're in an exceptionally hot market and concerned about said valuation, there are lenders out there who will use the contract of sale as a valuation in many instances - so that hurdle can be tackled with relative ease.

 

[Juliana Ardila]

Hi,

Thinking of going to another broker and trying to get a proper pre approval!

The best you can do now is provide your payslips to make sure you meet servicing and get a property report from your broker for each property you are going for. In that way you have a good idea of what the property is worth and don't bid too much.

Corey is right, if you borrow 80% of the property value or less, there are lenders that will take the contract price as the market value.

I hope this helps.

 

[Jamie M]

Hi,

Having been approved conditionally for a loan, with the condition being to provide rental income, payslip and the sales document.

So what did the lender actually assess......?

Cheers

Jaie

 

[Peter_Tersteeg]

Pre-approval is a gimmick

Umm, no. There are plenty of circumstances where a pre-approval is a really good idea.

So what did the lender actually assess......?

Cheers

Jaie

Lenders often have a standard letter asking for payslips and all the other stuff even when they have a lot of it. It's a standard letter. Your broker should be able to advise if the application was properly assessed.

Is "Jaie" your street name now? Spending too much time on the alleyway basketball courts in the hood?

 

[Jamie M]

Umm, no. There are plenty of circumstances where a pre-approval is a really good idea.





Lenders often have a standard letter asking for payslips and all the other stuff even when they have a lot of it. It's a standard letter. Your broker should be able to advise if the application was properly assessed.

Is "Jaie" your street name now? Spending too much time on the alleyway basketball courts in the hood?

Stupid iPhone.

Preapprovals have their place - but not for everyone.

OP - it's impossible to get FULL approval without having a property to purchase.

Some lenders will assess the deal and make the val the only requirement - some will just spit out their standard letter which is no more than a computer generated servicing assessment.

Cheers

Jamie

 

[Waldo]

get a property report from your broker for each property you are going for. In that way you have a good idea of what the property is worth and don't bid too much.

What type of property report does your broker offer? I wouldn't be placing an offer based on the number a computer generated property report comes up with, since ranges tend to be +/-30% off actual market value.

 

[Redom]

What type of property report does your broker offer? I wouldn't be placing an offer based on the number a computer generated property report comes up with, since ranges tend to be +/-30% off actual market value.

Yep, the price guide isn't very accurate on some of those reports. The comparables are often where the most useful information lies. One small piece in forming price expectations.

 

[Jess Peletier]

What type of property report does your broker offer? I wouldn't be placing an offer based on the number a computer generated property report comes up with, since ranges tend to be +/-30% off actual market value.

Good point - I had a desk top come back $140k higher than the full val. ($630k/$490k) Would not have wanted to rely on that for formulating an offer.

 

[Marty McDonald]

Good point - I had a desk top come back $140k higher than the full val. ($630k/$490k) Would not have wanted to rely on that for formulating an offer.

Or for gearing up more then the true value of an existing property. You don't want to borrow more than 100% (or 90%) by accident.

 

[Rolf Latham]

Good point - I had a desk top come back $140k higher than the full val. ($630k/$490k) Would not have wanted to rely on that for formulating an offer.

fab for a refinance : )

ta
rolf

 

[Redom]

Good point - I had a desk top come back $140k higher than the full val. ($630k/$490k) Would not have wanted to rely on that for formulating an offer.

Yep - seeing wild differences in vals for same security for Sydney properties. Had a $220k+ difference recently (25%). Highlights the benefit of having the flexibility to valuer shop when refinancing.

 

[Waldo]

Or for gearing up more then the true value of an existing property. You don't want to borrow more than 100% (or 90%) by accident.

Its still money mate

The list of comparables in the reports is the only part I look at - the rest tends to be absolutely useless (unless the suburb is very homogenous in stock).