Some of you may know that I am expecting the birth of my first child this Christmas. It’s an exciting time and a huge learning curve as my wife and I attend ante-natal classes, decide on prams and cots and think about how best to look after our new little bundle when we get home. During this time I have come to the realisation that there is so much I don’t know and even more that I simply cannot prepare for.
The inability to prepare is also sometimes true when it comes time to arranging finance. Situations arise that are impossible to foresee or avoid – they just happen.
Or, if a lender says ‘no’ some people give up too easily and don’t seek out other alternatives.
Considering this I decided that the best thing that I can do for you today is to illustrate some financing success stories in action… despite tightening and changing of lending policies and unexpected issues that you simply cannot prepare for.
Success Story 1
Lenders can and do make mistakes. A growing trend that I have noticed recently is that the credit assessor’s reviewing your finance applications are either less experienced or dealing with large quantities of applications. Unfortunately the outcome for clients can be declined applications due to the credit assessor’s inability to assess income correctly or their inability to give complex applications the time needed to complete assessments correctly.
At the moment lenders have less money to lend out so they are picking and choosing who they want to lend money to. If there are difficult or complex lending scenarios, credit assessor’s are more inclined to say no. Its human nature to take the easy road after all.
My role today more than ever is to be a financial advocate for my clients. In fact I am finding myself actually teaching some credit assessors how to read my clients financials correctly so that the income is assessed accurately.
Of course I am happy to do this, however I am positive that some people who either go directly to a lender or dealing with an inexperienced mortgage broker are having their applications declined, simply because the person assessing the application could not / did not assess the income correctly!
I have at least 3 applications proceeding at the moment that were initially declined due to inaccurate reading of financials by credit assessors.
If you know of someone who has a lending application inexplicably declined please ask them to call Loans Australia on 1300 855 4300. One of our greatest skills is taking a complex finance situation and presenting it to a lender so that it is easily comprehendible.
Success Story 2
Recently valuations have started to come in a little lower than some expectations but let me tell you about an extreme case.
A client purchased a property at auction. Generally when an auction is involved it is standard practice that the valuation matches the sale price because an auction is a great predictor of what is happening in the market at any given moment in time. In addition, prior to purchasing the property the client completed thorough research, spoke to many agents, actually lives and owns multiple properties in the area and had recent sales evidence to back up his sales price.
My client did absolutely everything right.
Unfortunately the valuer did not agree. In fact he did not agree to the extent that the valuation came in $125,000 lower than the sales price. When large disparities like this exist we can often negotiate with the valuer. Unfortunately in this case the valuer would not budge. It sometimes happens.
To get this application over the line I needed a lender that would accept the contract of sale and hence not require a valuation. Secondly, I needed a lender that would accept the income which included large amounts of overtime and rental income (lenders differ as to how much overtime and rental income they are prepared to accept). Thirdly I needed a lender who would accept a trust structure on the title of the property (less lenders are accepting trust structures in the current economic climate). Thorough understanding of multiple lenders policy’s ‘inside out’ is the only way to get such applications approved.
The client was prepared to move forward because they disagreed with the valuer and firmly believe from their considerable knowledge and research in the area that the property is good value for money. At the end of the day the client needed to proceed otherwise they risked losing a deposit of over $50,000 plus costs. It’s my job to ensure the lender also accepts this as the case.
Using considerable negotiation skills (especially getting the assessor to agree with my assessment of acceptable income) I organised a full approval for the client based on the contract of sale price.
This is what we do at Loans Australia – day in day out. Act as your financial advocates for getting finance approved when others might give up. We ensure that the credit assessors get it right and that your application is presented in the best possible light.
So if you or someone you know are experiencing difficulties or frustrations with getting finance approvals please pass on the Loans Australia name. Your referral is the kindest way to say thankyou.
Plan for success!
Stephen McClatchie
Founder and Director