Hi,
I have made an offer to a property in burwood east, paid the 10% deposit and now is having trouble with the home loan.
My final settlement is 23 april 2003 and until now I havent got an approval from the loan.
I am a migrant in Australia, and only been here for 9 months and I am a self employed man.
I met this guy James(not his real name), he is a home loan broker. He was introduced by a LJ Hooker salesman. He was initially very kind to us. He came to our house and tell me everything I wanna know about home loan and the problems. He even gave me advise about what to say and do to the agent who is selling the house.
And finally, I agree to let him do my home loan. We have agreed the interest rate of 6.07% with Suncorp Metway.
Ok, about 1 week after I paid the deposit, I expected that the home loan certificate is ready. I called him and he told me verbally that my homeloan already got a pre-approval subject to home evaluation. I was happy and couldnt wait to move in to my new house. He told everybody including my agent that it is pre approved. 1 week had passed and I confused why I havent got the pre approval letter. Then I called him again and he told me there is a problem with me being only 9 months and self employed. So he said it must be a low doc loan. I didnt know what the hell is a low doc loan but I didnt ask him that time thinking that maybe it is just a matter of what you call the loan.
Later on I found out that a low doc loan means that the interest will be higher than normal rates. And belive it or not he didnt tell me that.
I told him from the first time I met him that I am a self employed and only in the country for 9 months. He knews that and still didnt tell me about low doc loan and all that.
I was pissed of and asked him why he didnt tell me, and he simply said “I dont know about low doc loan” I just didnt know what else to say, I was so confused and mad, and he told me it is pre approved for low doc loan, and I asked him, how could it be approved without me agreeing the interest rate? When we applied for the home loan, It was 6.07%.
He told me that I would have to pay $27/week more from what we have agreed. A total of $1927. I told him I cant afford that cause my initial payment on the paper was 1800 (around that figure)
That initial payment is my limit, I cant go further than that.My contract of sale is subject to finance.
My question is…
Can I have my deposit money back? Cause I am thinking to cancel the house purchase cause this thing makes me mad. And I believe it is a sign that this house is not the right one for us. Not trying to be superstitious but…
I am pretty sure I can get my money back cause I never got approval and wouldnt get approval. That James told me that my initial application was rejected because I am a self employed, not done the tax return yet and only in the country for less than a year. And I couldnt apply for low doc loan cause my monthly payment will be way out of my power. And I couldnt increase the deposit, I got not much left in my wallet.
If they are taking my money then it is a robbery.
But please I need advise how to cancel it.PS. I really do not want to cancel it actually, I have paid almost 1000 for the bits and pieces like home inspection $450, paid that idiot James $300 and would pay my conveyor soon for another 500.
I really need your help, or if you guys know who should I talk to, please give me the ph number and the name.
Any help will be much appreciated.
THANKSIvan
Hi Ivan,
Firstly, welcome to the forum.
Unfortunately, you are not the first person to be stung by these type of people, nor will you be the last. [}
]Do you have a lawyer you are using for conveincing (please excuse my spelling)? If so, I think you should call him and discuss the situation, after all that is what you’ll be paying him for. Secondly, James (or whatever) shouldn’t have been paid unless you signed some paperwork authorizing access to monies.
Get a copy of the paperwork you filled in (the loan application) which you are entitled. Ring up James and find out who his superior is. Always go to the top ( ie ‘Queen Bee’), rather than the ‘worker bees’, such as James. Ask to find out why James mislead you, when he knew you would have difficulty obtaining a loan, due to your recent arrival in Aust etc. Tell him, if the monies are not reversed, there will be serious repercussions of his unethical conduct.
Speak to your lawyer. The fact that you made the contract subject to finance and this was initially refused (Do you have a copy of this in writing?), you should be able to get all your money back. Do not sign anything James or his buddies give you or try to bully you, without getting someone to look over it.
For your own peace of mind, STRESS NOT. Better you loose that little amount of money from incidentals now, then struggle to pay a huge home loan and go into default and have that listed on your credit rating against any potential future purchases.
Seek the lawyers advice. All is not lost. Don’t sign anything.
Good Luck and best wishes
Sooshie [
]There are no problems, only solutions
Hi,
Sooshie has good advice here (she’s not just an excellent cook!).
My input is:
1. If $1,800 was your limit then get out of the deal now because sooner or later interest rates will go up and if you’re forced to sell then you’ll probably lose money. The only saving factor here might be if you are looking to lock in for 5 years at a fixed rate of interest and plan to have more cash at that time to pay any extra interest.
2. Your ‘subject to finance’ clause usually stays open until you advise the agent (not necessarily in writing) that you have finance. Sometimes the wording says “finance by XYZ institution with ABC days.” Pull out the contract and read it over.
3. Any money ($300 application fee?) you paid to the boffin should be refunded to you given the service you received plus your other out of pocket expenses. Argue about this and go higher up the chain. If needs be threaten to go to the media, the ACC, Fair Trade etc. The negative publicity won’t be worth just handing back your money.
4. Hassle the fool who referred you to this guy to begin with. Go to his boss.
5. Is this property to live in or for an investment. If it’s an investment then please let me know what’s your strategy. I sense you are on dangerous investing ground.
Hope this helps.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Ivan, I posted last night (even though I was half delerious with sleep, to try to aleviate some of your anxiety. Steve has put all the points down, plus some, which will put you in a better position and hopefully a better frame of mind. I assumed however, that this purchase was for living in and not for investment purposes.
For future reference, agents will often slide you a card of a person (usually a friend of the company) who does finance. They’re a dime a dozen, but a bad one will cost you (trust me, our first wrap was done with a bozo and we paid) The commission is pretty good and they take a cut aswell. Bottom line – You pay. [
] Prior to looking for any property is to do your groundwork/homework/research etc. Get your conveyencor (excuse spelling! Hey Steve, can we finally get a SPELL check happening here!!! []), someone to do finance and will let you know how much you can spend, an investment plan and a list of all the incidentals (usually allow for 10%). And NEVER buy on an emotional persuasion.Good luck and I hope you felt relieved that someone heard your plea for help. [
]Cheers
Den Mother Sooshie [
]There are no problems, only solutions
Hi Ivan
Iam confused as you indicate that you already have a settlement date. This would indicate that the sales contract is final, meaning it has exchanged.
If the case is exchange has taken place then there really is no avenue for recinding the contract without foregoing the 10% deposit or more if subsequently the vendor gets a lesser price for the property.
As Mr Adelaide has mentioned there is no point starting to chase your tail about the fees etc if you don’t have what was said in writing.
As far as not being able to afford the property well once you commit to the loan and it is a variable loan then any increase will directly affect your repayments and should have been taken into considerations when budgeting for this purchase.
I would immediatly speak to ‘James’ and make sure that the finance amount is sufficient to settle as normally a low docs loan has a lower LVR and you may find that you are short 10’s of thousands of dollars. If this is the case then all your other prolems will shrink into insignificance.
Cheers
Hi, Ivan.
Not all is lost. There is a positive……..if you are stuck with this property – assuming contracts have exchange (if they haven’t you should be able to get out of the contract)- then do a quick upgrade and on sell for a profit, then learn by your mistake. Find someone who has experience at mortgage broking, and who can give you references from other customers., then make sure you ask the right questions from them – for example don’t ask ‘Were you happy with the service?” but ask ‘Was there anything you would have liked done better?’, or “Did you have any problems with their service?”
Also, ask if the broker is a member of the MIAA – a controlling body, under which they must have insurance for public liability – if this guy ‘James’ has insurance, I’d be asking more questions as it appears he has given incorrect advice.
Good luck[][]Mr. Adelaide,
Sorry… but it seems that I mistakenly deleted your post when I was doing some clean up editing.
Please accept my apologies [
]Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hello New Australian
my suggestion would be to obtain pre-approval prior to next purchase. I was once a new australian and understand what its like in a new country. I am a Securitised Lender (lend people money to buy houses) would be happy to assist in you seeking pre-approval.
I’m no legal boffin but from what you’ve descibed you should receive your deposit back.
Contact me if you need help I’m in Canterbury,Vic
[email protected]These idiots (i.e. James) taint the reputation of mortgage brokers. I have a couple of quick comments to make:
1. Don’t pay mortgage brokers anything! I have never charged a client. If I was in a situation where I thought I might have to charge (can’t think of one) I would only ask for the money after I have achived a result.
2. Always seek a pre-approval! You don’t know what you don’t know. Lenders change policies all the time. Sometimes people have credit issues (on their credit records) without even knowing it.
3. Don’t lie in application forms. A broker may suggest a low doc loan to get around lenders policies. They may suggest you to certify that you earn more than you actually do. Don’t! You never want a loan you can’t afford. You have a legal obligation to only tell the truth on application forms. After all, if your found out you will suffer, not the broker.
I don’t know any lenders that will approve a loan if you’ve been self employed for less than 2 years. James should have known this!
Gary Evans – do you lend to self employed persons with less than 2 years experience? If so, then I would like to know about your products. You can contact me at [email protected].
Lastly, I apologise for all the mortgage brokers like James. I would ask Ivan (and people like him) to make complaints to ASIC. That’s the only way we can squeeze these guys out of the industry. [
]
]
] Prior to looking for any property is to do your groundwork/homework/research etc. Get your conveyencor (excuse spelling! Hey Steve, can we finally get a SPELL check happening here!!! [
]), someone to do finance and will let you know how much you can spend, an investment plan and a list of all the incidentals (usually allow for 10%). And NEVER buy on an emotional persuasion.
]
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