Thanks for replying Richard and Terry

The bank is the Bendigo bank not sure who the mortgage insurer is.

When i first approached the bank the manager said as long as the valuations are ok it should not be a problem but they would run it by a mortgage insurer just in case i needed it. Minimum price the house will sell for is $550,000 the block i want to buy was sold 18 months ago for 514,000 with a house on it the developer that bought the property demolished the house and was going to put townhouses on it but has since come into financial problems the block was put on the market at 400,000 and my offer of 350,000 was accepted subject to finance.

The mortgage insurer was picking random payments made by spouse from bank statements wanting clarification where the payments went also questioned a supposed loan from GE.  Random payments they queried were to places like office supply companies. When i financed the $14500  i got finance myself through BMW finance but did speak to a broker about a loan and apparently thats how the GE mixup came up. Savings history has not been much as we have been O/S 7 times in the last 2 years. The bank manager has suggested i make a few extra payments on the personnel loan and reapply and from what i can understand the mortgage insurer did not decline the finance but suggested to the manager that we withdraw the application before proceeding further.

I hope this is enough info for you guys to make an informed decision and appreciate any advice given.

Thanks,