depends a little on the borrowers credit score
PAs can be problematic
We will only do them where its structurally needed - ie an auction or Unconditional purchase
ta
rolf
Possible steps after loan app rejection?
- Thread starter Michael_X
- Start date
depends a little on the borrowers credit score
PAs can be problematic
We will only do them where its structurally needed - ie an auction or Unconditional purchase
ta
rolf
I'm of mixed feelings about pre-approvals.
These days, most stand up fairly well. There's still a handful of lenders that have a high probability of not honoring a pre-approval, but most are fairly good.
For the majority of people I deal with, it's completely unnecessary. We look at their income documents, their assets and liabilities and I can make the assessment fairly easily and accurately on what the banks response will be.
Then occasionally you get a curve ball. In the past 2 years I've had 2 occasions where the client had a default they didn't know about, nor would have reasonably predicted. It wouldn't have changed the outcome, but it would have made things a little less stressful when they made the actual purchase.
That said, pre-approvals can be a significant amount of work, and about 50% either don't go ahead, or expire and need to be resubmitted later. I can understand why a lot of brokers don't like them.
Consider that it takes about 3-10 hours work for a pre-approval (both in submission and follow up). Let's assume an average of 5 man hours.
Assume the broker is reasonably successful and writes 30 pre-approvals per year, in addition to all the other loans they write.
50% go nowhere or need to be resubmitted because they've expired.
5 x 30 x 50% = 75 hours of work wasted per year, or 9.375 working days.
It's not the end of the world, but try telling your boss that they're going to pay you for 9 working days this year and you'll be completely non productive.
I don't really mind pre-approval, in fact we do quite a few, but there are some guidelines I like to follow. Generally I tend to look at the circumstances of the application and make a recommendation. Loans over 90% LVR it's always a good idea. 80% or less it's not a big deal. 80% - 90% is a grey area.
These days, most stand up fairly well. There's still a handful of lenders that have a high probability of not honoring a pre-approval, but most are fairly good.
For the majority of people I deal with, it's completely unnecessary. We look at their income documents, their assets and liabilities and I can make the assessment fairly easily and accurately on what the banks response will be.
Then occasionally you get a curve ball. In the past 2 years I've had 2 occasions where the client had a default they didn't know about, nor would have reasonably predicted. It wouldn't have changed the outcome, but it would have made things a little less stressful when they made the actual purchase.
That said, pre-approvals can be a significant amount of work, and about 50% either don't go ahead, or expire and need to be resubmitted later. I can understand why a lot of brokers don't like them.
Consider that it takes about 3-10 hours work for a pre-approval (both in submission and follow up). Let's assume an average of 5 man hours.
Assume the broker is reasonably successful and writes 30 pre-approvals per year, in addition to all the other loans they write.
50% go nowhere or need to be resubmitted because they've expired.
5 x 30 x 50% = 75 hours of work wasted per year, or 9.375 working days.
It's not the end of the world, but try telling your boss that they're going to pay you for 9 working days this year and you'll be completely non productive.
I don't really mind pre-approval, in fact we do quite a few, but there are some guidelines I like to follow. Generally I tend to look at the circumstances of the application and make a recommendation. Loans over 90% LVR it's always a good idea. 80% or less it's not a big deal. 80% - 90% is a grey area.
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I don't mind arranging pre-approvals (fully assessed ones) - especially if the clients is fairly confident that they'll be purchasing within the pre-approved time-frame (otherwise it's a credit file hit that should be avoided), they're going to auction or there's just something a little tricky about the deal.
Having a preapproval will usually speed up the formal approval turnaround too as most of the hard work has already been done and it's usually just the val that needs to be sent in (as someone mentioned previously).
Cheers
Jamie
Having a preapproval will usually speed up the formal approval turnaround too as most of the hard work has already been done and it's usually just the val that needs to be sent in (as someone mentioned previously).
Cheers
Jamie
I would love to now how this one developed - did the broker submit the app or did he make up the rejection?
I wouldn't call it "broker shopping", more "making sure broker knows what they are doing". It's not hard to get a dud mortgage broker and I've had my fair share in the past.
Finally have an update to share with everyone.
Thanks to two brokers on this forum (Shahin and Rolf), we managed to track down the application over the weekend. It hadn't been submitted properly and was still waiting to be processed.
Luckily this meant that it hadn't been rejected and had either been sitting there for quite some time or submitted very late.
Their advice was to go with the current broker and push for a resolution.
We extended the finance date by another week and thankfully the broker in question finally got the loan across the line today.
A big lesson learnt, having a strong team is key to your access in the property game.
I want to give a big thank you to everyone on the SS forum. All the suggestions, Rolf & Shahin's help got my friend across the line!
Thanks to two brokers on this forum (Shahin and Rolf), we managed to track down the application over the weekend. It hadn't been submitted properly and was still waiting to be processed.
Luckily this meant that it hadn't been rejected and had either been sitting there for quite some time or submitted very late.
Their advice was to go with the current broker and push for a resolution.
We extended the finance date by another week and thankfully the broker in question finally got the loan across the line today.
A big lesson learnt, having a strong team is key to your access in the property game.
I want to give a big thank you to everyone on the SS forum. All the suggestions, Rolf & Shahin's help got my friend across the line!
My friend did his far amount of DD during the broker selection process.
During this process, the broker in question was amazing. Answering emails within minutes and quick to call with answers.
When things started to fall apart, that's when he went MIA.
Let's just say my friend felt somewhat duped.....
I agree a proper Pre-approval with Macquarie is worth its weight in gold especially on a complex deal.
We use this all the time to give buyers comfort.
Shouldn't be too difficult to find out the Broker's Mac Bank BDM and the reason why the deal was knocked back.
As has been said we are getting our Mac Bank deals over the line in 48 hours or less with a phone call to the BDM.
We use this all the time to give buyers comfort.
Shouldn't be too difficult to find out the Broker's Mac Bank BDM and the reason why the deal was knocked back.
As has been said we are getting our Mac Bank deals over the line in 48 hours or less with a phone call to the BDM.
