we have a contract on an investment prop in ceduna, SA. its only $150,000 and the stuff going on there is looking very positive. so we were purchasing a 3 bedroom house that already is positively geared with a 6 month lease in the hope that when the new mine opens up in May 2010 the houses in the area would increase in value. the plan was the sell the prop in 3 – 5 years, depending on the market there at the time.
anyways, i just got a call from the bank saying that the money we are asking is fine, its just the location. cos its 5 hours from adelaide they are declining the loan application.
im so annoyed. i was hoping to make a bit of $ off that prop.
i am appealing their decision so i find out this arvo if they accept or not. but the lady said that if they decline again there is another way to push the application through, going to their commercial division or something? im not sure. Im waiting to hear back about the appeal this arvo.
pretty disappointed as ive already spent $250 on pest inspec, $250 on building inspec, $400 on solicitor, plus the hours of getting everything read and organised and sent away.
Find out if there is a bank in Ceduna, and try to go with the local branch. The local manager will be more aware of the local economy than someone else. Some local managers are able to use their discretion a bit re value of local property, because the bank knows that in very small, remote communities, local knowledge is much more up to date than that of a valuer, and also it can cost quite a bit to get a valuer where you want them when you want them in remote areas. With such a small lend, this might work.
It will depend on the lvr as if mortgage insurance is involved it will not be the lender decision but the insurers.
There are other options however additional information will be need to give you an answer.
Richard Taylor | Australia's leading private lender
You may find finance through a non bank lender but lvr would be lower – some self insure the loan
just letting you know that I appealed it and two days later they came back and said that they will allow the loan
I basically told them what is happening in the area and indicated to them how low risk it is for them because I have $220k in equity on another property – and Im only wanting $150k.and they said that pending a valuation done on the property I will get finance
so there were 80's style high fives all around after that phone call
hahaSounds like they may have cross collateralised the loans across the 2 properties.
Not sure i would be doing that.
I would be telling them to take the new property as sole security and lend against this or you will take your business elsewhere.
Richard Taylor | Australia's leading private lender
This lender sounds pretty hopeless. Try a mortgage broker, or threaten the bank that you’ll refinance all your loans, that will put a bit of fire under their butts…
its CUA. we were going to threaten to move everything to someone else, but they came through anyway.
i was told that the postcode was considered high risk, so they didnt even really consider my loan. but then when i pointed out it was low risk thats when they read through it all i reckon. my husband and i think the whole situation wreaks of laziness on their part.
CUA are classic when it comes to Cross collateralisation.
Stay put and you will be digger yourself a bigger grave for the future.
Richard Taylor | Australia's leading private lender
thanks for your advice richard – ive sent them an email to see what is happening with that. are they allowed to do it without my authorisation/knowledge, or is it something i sign off on?
also – my financial planner is seeing me in another week with my completed financial plan. he said that in it he will be putting some recommendations of which bank/financial insitution I should be dealing with for my various accounts. the financial services company isnt linked to anywhere and isnt getting any commissions so ill be getting a unbias advice. i SO cant wait to recieve that plan … it cost me some $$$
karenday wrote:thanks for your advice richard – ive sent them an email to see what is happening with that. are they allowed to do it without my authorisation/knowledge, or is it something i sign off on?It will be done with your knowledge – you just need to understand what you are signing.
I feel you Karenday,
I used to be with CUA. They were great when I only had one loan, but as soon as I came knocking on their door to purchase further properties they were extremely cautious. They made it very difficult to use their services again so we reluctantly went with Comm bank who were very keen to aid our investment ambitions.
It's a shame because we've now lost out on the 100% offset on a fixed rate. Comm bank will only offer us 1.5% on monies in offset account when home loan is fixed
Best of luck with your loan.
It is a spam
I basically told them what is happening in the area and indicated to them how low risk it is for them because I have $220k in equity on another property – and Im only wanting $150k.
haha
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