- Home loan type: construction loan, vacant land loan, guarantor home loan
- Customer goal:To get formal approval for a land and construction loan.
- Loan amount: $140,000 land and $ 280,000 construction (100% LVR).
Chris and Gemma were childhood friends who were reunited by chance when they both got accepted as faculty members in a local community college in Rockhampton.
They eventually fell in love, and after a few years together, decided to make it official and get married.
Now, parents of a beautiful baby daughter, they dreamed of building a nice house for themselves where they could start the family together.
Hoping to turn their dream into reality, they applied for a loan to purchase a piece of vacant land.
Chris decided to nominate his parents as his guarantors.
The total security value for the land and construction was of $420,000, with the land itself valued at $140,000.
The couple first approached a local mortgage broker for advice but he showed little to no interest because the loan amount was very low.
Not knowing what to do next, a quick google search lead them to Home Loan Experts.
They applied for a home loan with RAMS and everything was progressing well.
It seemed like they could see their dream coming true within a couple of years.
Four whole months into the process, RAMS conducted a credit enquiry and came across a car loan and a credit card that was initially undisclosed.
Even though the car loan had already been paid in full and the credit card in question was actually just a small store membership card because these credit facilities were undisclosed, these unintentional issues quickly snowballed into a huge problem for the pair.
Home Loan Experts mortgage broker, Jonathan PrestonJonathan Preston tried explaining to the assessor that these issues were unintentional.
Despite providing a statutory declaration that was signed by the clients, RAMS eventually ended up declining the mortgage application.
This is because the lending policies have become extremely tight and even the smallest mistakes can derail the entire loan process.
Securing a home loan has now become one of the toughest and most challenging jobs for brokers.
If that wasn’t enough, RAMS’ turnaround time was really lengthy and the couple had to wait for almost 5 months just to find out they were declined.
By this time, the finance and settlement dates agreed upon in the Contract of Sale had now lapsed so the couple were paying huge penalties to the vendor.
Luckily for Chris and Gemma, Jonathan was not about to give up on his clients.
Jonathan identifies another mistake on their application
Jonathan tried lodging their home loan application with a major bank but there was yet another issue with their application form.
The couple had unintentionally lodged an item as “child maintenance” instead of “childcare”.
Child maintenance refers to an ongoing payment made by a parent for the financial benefit of a child, and childcare simply refer to the care of children by a nursery while the parents are working.
This simple mistake fundamentally changed the way ANZ assessed their living expenses, significantly reducing their borrowing power to the point that the couple were declined for a second time.
Even though Jonathan tried explaining the mixup, the lender was not willing to listen.
At this point, Chris and Gemma didn’t care about paying the penalties. They just wanted to get formal approval.
As a last-ditch effort, Jonathan reached out to the ANZ business development manager and requested a different assessor who could review the application again.
Fortunately, the request went through and Chris and Gemma received conditional approval.
A Happy Ending
The key to success for Chris and Gemma was speed and determination.
Home Loan Experts mortgage broker Jonathan Preston was able to quickly identify where the couple went wrong when completing their application.
By speaking with the key decision makers and keeping the pressure on ANZ, he was then able to get an exception.
Once Chris and Gemma’s home loan was formally approved, the rest of the process went smoothly. After waiting for almost half a year, they could finally see their dream turn into reality.
Do you need help getting approved for a home loan?
Call us on 1300 889 743 or fill in our free assessment form today.