Personal income change after Finance Reapproval
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If you have a pre approval, you wont have much choice.
The preapproval will require new pays to convert to a full
The 20 % pay rise is the Upside, the downsides could be materially adverse
1. your credir score may be affected because it may be job x over y time
2 The job may have a probabtionery period.
I know many will disagree with me ( especially branch staff) but do not RELY on your pre approval to go to an auction or go unconditional on a purchase contract. As mentioned above, what appears as materially positve may in fact be adverse in the eyes of the lender, evenmore so if the LVRis > 80%
ta
rolf
I agree with rolf here. This is why when people come to me for a pre-approval I always tell them pre-approvals basically mean nothing and are just a marketing tool. This is especially so with the majors who credit score and is very dangerous to rely on it for unconditional purchases.
As to answer your original question - most people would not tell the lender about it because it just adds complications to the mix (assuming the finance has already been unconditionally approved). With a pre-approval it makes things a bit more tricky because they may try to verify your situation again which would cause problems if they ring your former employer and they tell the bank that you have already left!
As to answer your original question - most people would not tell the lender about it because it just adds complications to the mix (assuming the finance has already been unconditionally approved). With a pre-approval it makes things a bit more tricky because they may try to verify your situation again which would cause problems if they ring your former employer and they tell the bank that you have already left!
It depends on the client's situation. If the client has adequate resources, they would most likely be going for an 80% lend. In which case, getting the finance is really not going to be difficult and they can go unconditional at auction.
However, if the numbers are tighter, and the client is relying on an equity release and a 90-95% lend to do the deal, then I would never tell them to bid at auction because the LMI risk is just too high.
You can in some circumstances which I wont go into here
Its not hard to minimise the risks, and some common sense things are.
1.Using the right lender, all pre approvals are not equal,especially above 80 % lvr !
2. Make sure you do the DD on the property value...........try and get a val done before you get to auction ! And yes, auction vals do come in BELOW purchase price sometimes ...
3. Make sure the property is suitable security to match to the pre approval you have...........eg dont buy a dual occ with an ANZ 90 % pre approval
4. Minimise the risk of CRAA issues,make sure the lender has seen your file, if in doubt, get your own !
5. Minimise the issues of potential enviro risks where the valuer can sink your deal with a single STOOPID comment ! Again try and get a val at the front end.
And there are lots more
tarolf
The best insurance is to be able to pay cash on settlement : ) from savings or from DRAWN equity position.
ta
rolf
At great risk!
Yes, indeed but not everyone can do that!
My own (unconditional) purchase was an 80% LVR and even that was a stressful process because I had to wait 1 month for a valuation. Unbelievable.
Some pre-approvals are worth more than others. In many cases the pre-approval does involve going to a credit officer and whilst the decision they make is not iron clad, it probably will stand up. If it doesn't go to a credit officer (such as a pre-approval within whilst you wait at the branch), it's totally worthless.
The main reason I'll look to getting a pre-approval for clients is when the application is what I consider to have a high likelyhood of failure. This might be when the proposed loan is above 90% LVR, the maximum affordability is very close to the desired amount, or there's something quirky about the applicants circumstances.
In these cases a pre-approval may tell us if there's anything that might catch us out and prevent a full approval.
What I don't advocate is getting one pre-approval after another. The first one tells you if there's anything quirky about the application. Subsiquent ones (such as if the desired amount changes or the first one expires) just add credit hits and damage the applicants credit file.
The main reason I'll look to getting a pre-approval for clients is when the application is what I consider to have a high likelyhood of failure. This might be when the proposed loan is above 90% LVR, the maximum affordability is very close to the desired amount, or there's something quirky about the applicants circumstances.
In these cases a pre-approval may tell us if there's anything that might catch us out and prevent a full approval.
What I don't advocate is getting one pre-approval after another. The first one tells you if there's anything quirky about the application. Subsiquent ones (such as if the desired amount changes or the first one expires) just add credit hits and damage the applicants credit file.
Had a guy wanting a pre approval the other day so he would confident to put down a deposit on an off plan purchase to settle mid next year.
- 95%
- 5% genuine not quite avaialble yet
- was relying in the nsw fhog post 1/10 for additional funds to complete.
- on probation
- very young
Where do you start with this. He wouldn't accept that a pre approval was worthless. No doubt he trotted off down the rd to someone how would give him a piece of paper.. Thing is it will probably be fine for him when the time comes.
I honestly think that ASIC should step in and make clear guidlines about what is a pre approval and demand lenders give it properlt with tge only condition being suitable property and valuation. They make enough money to at least do this for their prospective clients
- 95%
- 5% genuine not quite avaialble yet
- was relying in the nsw fhog post 1/10 for additional funds to complete.
- on probation
- very young
Where do you start with this. He wouldn't accept that a pre approval was worthless. No doubt he trotted off down the rd to someone how would give him a piece of paper.. Thing is it will probably be fine for him when the time comes.
I honestly think that ASIC should step in and make clear guidlines about what is a pre approval and demand lenders give it properlt with tge only condition being suitable property and valuation. They make enough money to at least do this for their prospective clients
I would have done that, just made a note on the NCCP stuff about risks etc, and made sure he had a plan B if the val was short or his circumstances changed.
Are there still lenders who refuse to do OFT approvals if the settlement date is too far out? I remember that being an issue with a couple when NCCP first came out.
Are there still lenders who refuse to do OFT approvals if the settlement date is too far out? I remember that being an issue with a couple when NCCP first came out.
I had pre-approvals with two banks that ended up being worthless (including the bank that eventually financed my purchase).
The pre-approvals are for a set case of conditions. My property was deemed to be "uninhabitable" for rental, so the rental was discounted from my borrowing capacity.
The bank did approve the loan as an exception, as I advised I was planning to renovate and lease out. So everything worked out at the end, but it made me to be wary of "pre-approvals".
The pre-approvals are for a set case of conditions. My property was deemed to be "uninhabitable" for rental, so the rental was discounted from my borrowing capacity.
The bank did approve the loan as an exception, as I advised I was planning to renovate and lease out. So everything worked out at the end, but it made me to be wary of "pre-approvals".
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