UNCONDITIONAL HOME LOAN APPROVAL DOES IT EXPIRE?

Any general questions you might have in regards to loans and finance.
filo78
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UNCONDITIONAL HOME LOAN APPROVAL DOES IT EXPIRE?

Postby filo78 » Fri Apr 16, 2010 2:13 am

hI Everyone,

I applied for a home loan last year and it was approved unconditionally on the 9th of October 2009, my conveyancor have sent a copy of the approval to the vendor. The contract I entered into was off the plan therefore settlement happens upon completion of the building. I was initially told the building will be ready by either last week of Feb or Early march 2010, this didn't happen and before the end of march my broker told me that I need to settle before the 12th of April 2010 otherwise I will have to re-apply for my hope loan. This is apparently the Mortgage Insurance Companies Policy (Genworth) that if a loan is not advance within six months of approval a re-asssesment of the loan application is needed. In the event the bank refuses my loan I might loss my deposit and face lawsuit and possible penalties from the vendor. Can someone advice me on this please



Regards,


Filo78

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Otto Dargan
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Re: UNCONDITIONAL HOME LOAN APPROVAL DOES IT EXPIRE?

Postby Otto Dargan » Fri Apr 16, 2010 8:05 am

Yes this is correct an unconditional approval can expire. Usually if you provide new payslips etc prior to the expiry then you can extend the approval. Was your loan with CBA by any chance?
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filo78
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Re: UNCONDITIONAL HOME LOAN APPROVAL DOES IT EXPIRE?

Postby filo78 » Fri Apr 16, 2010 1:15 pm

Yes it is with CBA they told me that this is Genworth's Policy and not the banks. Any chance of CBA declining my loan? interest rate 6 months ago was low compared nowadays. Will they reassess me again? and if yes will it be based on the curent lending criteria?

Thanks

filo78

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Otto Dargan
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Re: UNCONDITIONAL HOME LOAN APPROVAL DOES IT EXPIRE?

Postby Otto Dargan » Fri Apr 16, 2010 2:39 pm

Yes it is the policy of CBA's LMI provider Genworth Financial that has been forced upon CBA. CBA are telling you the truth that it isn't their fault.

There is a chance that they can decline your loan if the loan no longer meets their serviceability policy. My recommendation would be to ask CBA when the approval expires (ask them when the Genworth LMI Policy expires). Also ask them if they can put in a request to Genworth to extend the policy for your loan for an extra month without doing a full re-assessment. I have successfully done this a few times with CBA loans that took some time to settle.

If they have to do a full re-assessment then they will use today's policy. CBA has amended their "benchmark rate" during the last 6 months. What this means is that not just will the rate rises reduce your serviceability however CBA will also add on a larger buffer on top of today's interest rates. Because of this it is highly likely that your serviceability will be greatly reduced.

If you do have to have your loan re-assessed then consider reducing your interest only period if you have one (with CBA this improves serviceability), cancelling credit cards or if need be then apply with another lender. We can help you if you have to apply elsewhere. Our brokers are experts in the methods used by banks to assess your ability to repay the loan and so we can quickly work out which lenders can assist you.
Otto Dargan
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P | 1300 889 743
Home Loan Experts

filo78
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Joined: Fri Apr 16, 2010 2:01 am

Re: UNCONDITIONAL HOME LOAN APPROVAL DOES IT EXPIRE?

Postby filo78 » Fri Apr 16, 2010 3:58 pm

Thanks for the advise I will try to speak to CBA about extending my loan approval if this doesn't materialize I will definitely contact you guys get your expert service.


Thanks heaps

Filo78


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