Archive for July, 2009
Surprise! Imagine being 10 days away from settlement and after a 3 month bank approval process, your bank says the “D” word – Declined!
Last week we witnessed another backflip decision from a lender, changing their minds after the client had received a “Conditional Approval”. The lender declined the application due to their income requirements changing, and the client is now exposed and not able to settle on time.
With credit policies continuously tightening, we strongly advise to hold out for an unconditional approval before committing to a purchase.
Types of Bank Approvals:
• Pre-Approval – An indication that the bank may approve, based on income information. Indicative only and it gives you an idea of what is possible.
• Conditional Approval – An assessment of all the facts and figures, and conditional to a valuation and final risk assessment.
• Unconditional Approval – a lender has looked at income, valuations, and all aspects of the loan application, and now fully commits to producing loan documents and providing funds for your purchase.
We find real estate agents are increasingly placing pressure on buyers to hurry their decision and exchange contracts. To allow for bank delays, we suggest negotiating a 3 to 4 week “finance clause“ to allow for Unconditional Approval and full lender commitment before you are legally liable to settle.
To find out more about finance clauses and avoid lender surprises, email us or call 02 9449 2333 to talk to one of our property specialists.
At Plan Assist, we do more than just Home Loans, we make property investors!
Plan Assist help families just like yours find their dream home or obtain their next property investment, even if they have no experience in searching or finding that great bargain.
Our acquisition team, mortgage advisory team and project management team are ready to act on the favourable buyer’s market conditions right now in Sydney.
To find out more about securing your next property purchase, visit our website or call 02 9449 2333 to talk to one of our property specialists.
In the last 2 weeks, the banks have toughened up and now want to see borrowers capable of repaying a 95% LVR Home Loan.
Banks now require “5% Genuine Savings”, to be proven by showing 3 months bank savings account statements. All large deposits have to be explained, and Mum & Dad throwing $10,000 into the account is not Genuine Savings. Neither is the First Home Owner’s Grant.
Example: Son wants to purchase First Home worth $400,000. Has good income/job.
Currently lives at home with Mum & Dad. Also has a personal loan which he repays $300pm.
Bank Requires:
a) Personal Loan Statements or credit card statements showing past 6 months repayment history
b) At least $20,000 (5%) in a savings account
c) Last 6 months statements showing a gradual increase in savings, building the deposit. Explanation of large deposits.
If Genuine Savings cannot be established, then the next best option is a 90% LVR Home Loan where you do not have to prove Genuine Savings and Mum & Dad can help out with cash.
To find out more about these recent changes, please call our Plan Assist Mortgage Team on 02 9449 2333.
Welcome to Plan Assist’s Blog.
Bookmark and check this page for the latest property news inlcuding recent articles, hot property deals, and the latest insights into property development from around Australia.
Look forwad to keeping you in the loop with the latest investment opportunities that hit our desk.
Regards
The Team
Plan Assist Pty Ltd
The RBA has not closed the door on further rate cuts this year, according to the minutes of its Monetary Policy Meetings in June and July.
However, if inflation is heading below the 2 to 3% target, is there any pressure to reduce interest rates? No, and that’s what the money market rates are suggesting for the short term – no movement from the RBA in the next 6mths.
So…rates are staying put.
On the flip side, Chief Economists from two of the major banks last month published their opinion stating the official cash rate will fall by at least another 50 basis points in the coming 6 months. They reckon the threat of high unemployment will spook property investors, and the whole economy will need a boost.
So, according to the bank economists, rates are going down.
It seems no one is sure where short term interest rates are headed right now. Whatever happens, rates are at historical low levels, and if you find a good investment that earns you a good return, talk to Plan Assist on 02 9449 2333 to help consider loan funding at historically low rates.