Hi all,
My wife and I recently signed a contract to buy a house and land package using the equity we have in our house.
We were to change banks for our home loan then use a non bank lender for the investment loan. As yet we have not signed any document with either the new bank or the non bank lender.
We received the mortgage documents from the non bank lender and noticed the figures were no where near what we expected. When we questioned the mortgage broker he informed us that the valuation was less then expected. He would not provide exact details over the phone, only in person, so he can put on the salesmen pitch I assume.
If we haven't signed any mortgage documents, can we use the subject to finance clause to break the contract?
Thanks for your advice
Matt
Hi Matt
If the Contract was subject to finance and the valuation did not come in at purchase price then i would be terminating the deal and running a mile.
Your Broker should be able to provide you with a copy of the valuation and if for some reason he can't he should defiinately be finding out the exact valuation figure for you so you can decide whether it is a deal you wish too proceed with.
If he doesn't change brokers.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Matt_13 wrote:Hi all,My wife and I recently signed a contract to buy a house and land package using the equity we have in our house.
We were to change banks for our home loan then use a non bank lender for the investment loan. As yet we have not signed any document with either the new bank or the non bank lender.
We received the mortgage documents from the non bank lender and noticed the figures were no where near what we expected. When we questioned the mortgage broker he informed us that the valuation was less then expected. He would not provide exact details over the phone, only in person, so he can put on the salesmen pitch I assume.
If we haven't signed any mortgage documents, can we use the subject to finance clause to break the contract?
Thanks for your advice
Matt
Holy crap! You should ditch that mortgage broker asap. Why didn't he tell you the loan was approved and for how much and why would a broker not tell you the valuation/
You should immediately seek legal advice (from a lawyer too and not a conveyancer or broker or hairdresser) and get out of that contract – if you can.
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
And what gets me Terry Matt didn't find out how much he was borrowing from his Broker until he received the mortgage documents…….
So much for sending the client a copy of the Faxed Approval…
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes, the broker must be part of one of these groups selling properties – probably $40k commission build in.
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
Matt_13 wrote:He would not provide exact details over the phone, only in person, so he can put on the salesmen pitch I assume.Run a mile. I have never once had need to meet my broker and yet have done a bunch of very successful purchases through him in just one year. There is no need whatsoever for your broker to meet with you. Everything can all be done via phone and email. If he is insisting on meeting with you I'd be wary that something is up. If he witholding any information at all, I would also be very wary. With people you involve in a large financial transaction, you need to be completely certain they are trustworthy and doing the right thing by you. This person sounds like he is not. Ditch him.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
And just because the valuation has come in short doesn't mean you can get out with the finance clause either. Has the finance been rejected?
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
Heh Jac, whilst you don't have to meet your Broker i hope you are looking forward to doing so lol
PS. get my SMSF email.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yep, can't wait till you get here for a visit. Many bricks will be bought on our shopping extravaganza I suspect ! Perhaps I'll gear things up so you can buy a whole street during your visit
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Terryw wrote:Yes, the broker must be part of one of these groups selling properties – probably $40k commission build in.My thoughts exactly.
Was the broker 'recommended' by the company selling the house and land package?
Yeah guys, it hurts to say it, but i think i have been scammed. I just hope I haven't noticed too late.
Their "independent" mortgage broker and property consultant were on the same floor in the same office building. Should have rung alarm bells then, but i got swept up with the idea of paying our PPOR off so quickly. I guess thats what they are depending on though.
Oh Matt Matt Matt this get worse by the day.
I would be terminating the Contract first thing Monday morning and then getting a Broker to review your current position and set up the new loan so that a minimum amount of equity on your PPOR is being used to support any new investment property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hey Matt,
I hope your aren't one of this kind of victims. I know it hurts. If it sounds too good to be true it probably is. Good Luck Mate!
Unconscionable tactics' that soured investment property venture
Battlers the target in real estate racket
http://www.smh.com.au/national/battlers-the-target-in-real-estate-racket-20121027-28cax.html
You must be logged in to reply to this topic. If you don't have an account, you can register here.
