All Topics / Finance / Be aware of ‘cheap’ and ‘no frils’ loans

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  • Profile photo of Simon_GSimon_G
    Member
    @simon_g
    Join Date: 2005
    Post Count: 56

    I just wanted to let people know of a pretty bad experience I had recently with a Home Loan company.

    I did my research online, and found HomePath to have the cheapest home loan that suited me. I obtained a pre approval for $50K over what I wanted to spend.

    About 1 month after getting the pre approval I found a property and made an offer that was accepted. This was $50K under my pre approval.

    I assumed (yes, never assume anything) that like most banks, I would notify them of the property, and within 48 hours they would value it and give me a yes/no. Well…..

    I told them about the property, and they told me it would take 2 weeks to assess my finances. Only after that would they arange a valuer, that would take upto another week before an answer would be given to me. The property had been on the market for a while and the vendors would not put a ‘subject to finance’ clause in the contract.

    When I complained to HomePath about why I bothered getting a pre approval when it obviously wasn’t worth my time. They told me that they always re check finances prior to approving a loan, and they are aware that it may cause delay.

    Unfortunately for me, as I would have preferred to take my business elsewhere, they had a good rate so I decided to continue with them.

    In a nutshell, we had a 10 week settlement and it wasn’t untill 2 weeks prior to settlement that we were formally told that the loan was approved.

    I would advise that you stay away from HomePath unless you can talk your vendors into the ‘subject to finance’ clause to cover yourselves.

    Profile photo of elkamelkam
    Member
    @elkam
    Join Date: 2006
    Post Count: 722

    Thanks for the tip Simon. My niece was looking at a home loan from them as, like you, she is attracted by the low rates. I will warn her.

    Cheers [smiling]
    Elka

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Simon

    You make a very good point but it is suprising how many clients still think that a low interest rate is the main think to look for when choosing a loan product.

    I have to be honest whilst i would not touch them with a barge pole i can name another half dozen institutions in the same position – low rate but offer absolutely nothing in return.

    Cheers

    Richard Taylor
    Residential & Commercial Finance Broker.
    Licensed Financial Planner. Ph: 07 3720 1888
    [email protected]
    Looking for life cover – We Guarantee to beat any quote you have in writing.

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Sounds like you got them in a good month. They must have sped up their processing times!

    Terryw
    Discover Home Loans
    [email protected]
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 4 posts - 1 through 4 (of 4 total)

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