Hi all! Just wanted to seek some advice to my current situation.
I have recently purchased an investment property and settlement is due on the 5/05/.Previous to exchange of contracts I had received a conditional approval with ING bank for a home loan. I have since provided them all documentation they have requested however they still require till the 15/04 (thursday) to give me an answer as to whether I have received a full approval.
My question is..
1) is this length of time taken to give a full approval normal?
2) And once they approve, will they have enough time to get ready the funds in time for settlement?
3) Should I look at talking to other banks in the meantime?My only worry is that it seems like it is cutting it fine in terms of time, especially if they decide to reject my home loan on Thursday.
Also unrelated to this topic, I have been looking at the type of insurance I will require. If I am using this an investment property and will be lending it out, is Landlords insurance the only type of insurance I need? Does anyone have any recommendations of who to go with?
Thanks for any advice anyone can provide in advance!
Insurance: AAMI Landlord insurance WITH tenant protection (which is extra)
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
The time to settle should be ok
Did you sign the contract subject to finance and this should have a date when finance should be fully approved, because if you are rejected this is your way out, or to renegotiate a finance date.
Barry
Hi Cinooo
I also have a loan with ING for a property due to settle on the 30th April. ING took approximately 5 business days to give me final approval from the date the conditional approval has been granted.
Do you know the reason for their timeframe? Perhaps worth asking…
Cheers
E
JacM: Thanks I'll look into AAMi!
basbog: no I didn't sign with subject to finance.. in your opinion do you think I have enough time to sort out finance with another bank if I wait to find out on Thursday (or should I start the process with another one just in case for backup right now)?
Hi EvaCD, it's been a bit frustrating for me as I am going through a (very bad) mortgage broker who was referred by a friend and they are doing the application on my behalf.
I am not sure of the reason for the hold-up, all my broker has said so far is that I will find out for sure on Thursday. I received conditional approval (according to my broker) on 31st March so its taken substantially longer compared to your case! I think I could have done a quicker and better job had I applied by myself rather than through the broker!
cinooo wrote:Hi EvaCD, it's been a bit frustrating for me as I am going through a (very bad) mortgage broker who was referred by a friend and they are doing the application on my behalf.I am not sure of the reason for the hold-up, all my broker has said so far is that I will find out for sure on Thursday. I received conditional approval (according to my broker) on 31st March so its taken substantially longer compared to your case! I think I could have done a quicker and better job had I applied by myself rather than through the broker!
Do you know what are the conditions your approval is subject to? What I am getting at is, these may be minor things that are under your control (eg. providing copy of the stamped contract to ING), i.e. you know you will comply and therefor the risk of your laon being rejected due to the failure to comply with these conditions is not that great.
Also, keep in mind that the bank will not need more than a couple of days to get ready for the settlement. So, in my view, getting your final approval by Thursday should be just fine for the 5th of May settlement.
If your loan is not approved on Thurs you would need to talk to vendors agent & conveyancer and tell them the situation and ask if the vendor would give you an extension on settlement, say 2 weeks and go to another lender. Most people should be OK with this, otherwise they can charge you interest on the unsettled property.
Don't panic
Barry
Hi Cinno
Re the Insurance……I had a cover with Allianz (Landlords Insurance) thru the NAB…..lucky enough to never have had to claim and found both their online and call centres helpful
KG
cinooo wrote:Also unrelated to this topic, I have been looking at the type of insurance I will require. If I am using this an investment property and will be lending it out, is Landlords insurance the only type of insurance I need? Does anyone have any recommendations of who to go with?Most competitive and broad coverage I’ve found is with Lumley (Westfarmers) via Whitbread Insurance Brokers in Melbourne (can’t go to Lumley directly – I checked!). Even cheaper than EBM.
I wouldn’t pay more than $200 a year for a standard landlord’s insurance policy which should include $20,000 for accidental damage, $20,000 for malicious damage by tenants, $5,000 for theft, 15 weeks for tenant rent default, 52 weeks for loss of rent following physical loss or damage and $20M legal liability.
You may only need to use landlord’s insurance once in your investment lifetime, but the cost would still be worth it. Imagine if your place was severely damaged and unable to be rented out – would you be able to pay the mortgage?
Building insurance is also essential in the event of a fire, storm, etc. If the property is under strata title, building insurance is covered by the body corporate fees. But make sure the amount insured is enough to cover the replacement value of each unit/apartment (check with the body corporate – you are entitled to a copy of the insurance policy).
Don't beleive the broker, ask them for a copy of the conditional approval.
If you do get approval on the 15th then the bank will issue documents, you sign and send back and then settlement is booked in. I have had clients who had run out of time and this was all done in 2 days – but normally it can take about 2 weeks. Banks also ask that you give them at least 10 days to settle after the return of documents, but they don't really need this.
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
Hi all, thanks for the many replies regarding home loan & insurance, much appreciated.
Just to give an update, the ING loan is going well but as I was not feeling very secure with my mortgage broker who was handling the deal (very inefficient and lacked communication) I ended up searching around and am well into the process with NAB, which turns out to be an even better deal. So I'm feeling safe at the moment as if one or the other fails I still have a back up.
Thanks again to all that contributed!
Hi,
Theres a good article about landlords insurance in this months API. I’m with Terri Sheer as my PM has had very good relations with them. Just ensure you read the PDS and be sure of what you are covered for. With your building insurance don’t forget to get contents insurance for things like dishwashers, air cons, hot water systems etc.
Good luck!
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