All Topics / Finance / Be aware of ‘cheap’ and ‘no frils’ loans
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.
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]
ElkaSimon
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
Sounds like you got them in a good month. They must have sped up their processing times!
Terryw
Discover Home Loans
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Send an email to get my newsletter.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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