Hi all,
Question about finance and LMI. We recently made a loan application with Westpac for a residential 5 acres with a 3×1 Toowoomba. Very well priced, distressed sale, comparable sales minimal due to the large acerage around the area but enough to compare with. We were told by our broker that a 95% lend with LMI was favorable with our assets/savings etc, no issue with Westpac wanting to lend to us. The loan went conditional, subject to valuation.
The valuation came back (2 weeks ago) with 'unconventional dwelling', high fire rating', and 'not connected to town water'. Nothing wrong with the dwelling, an A frame style house meeting A1 building code, the property has town water connected, and the medium-high fire rating is standard in relation to the TRC fire zoning (never been a fire in the area, just a rating that if there ever was a fire that there is a lot of bush around).
We kept asking if everything was ok and were reassured there was no issue, the bank was swamped and and the file was being finalised.
The bank turned around on finance day (yesterday) and 'deferred' the decision. They had had over 2 weeks to get back to us with a decline thereby opening up our opportunity to access finance elsewhere but we were consistently reassured that there was no issue and the file was being finalised for 'unconditional'. They (the bank) then turned around today and said that they were not offering a decline but that if we came up with a 20% deposit they would lend.
I'm a little confused as to the whole 'rural' lending thing. Technically, the property is not rural, it is within the Toowoomba postcode, but has different issues, being 5 acres, fire zone. And has an incorrect valuation.
This afternoon the seller very generously offered a 2 week extension to get the finance sorted. We wish to do a 95% lend ($490K), this is an investment property.
Advice from personal experience/similar situation?
Can anyone recommend an expert to speak to for tricker sales such as this?
What additional knowledge/lessons can I take from this?
I know I most certainly wont be refinancing any of our other property's with Westpac. The have acted in a very poor manner. I would even say unethical. I say this because if they had of flagged an issue I wouldn't have wasted nearly $2k on all the inspections/searches etc. They have shown they don't value my money so why would I give them my business
Thank you in advance for taking your time to comment.
Sounds like the broker was lying to you about the progress.
I would say it is probably not possible to get such a loan through LMI. 5 acres will be difficult but the main problem sounds like the house
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
Must admit i am searching why the Broker would ever put the deal to Westpac in the first place but there may have been method in the madness.
Anyway think it is very unlikely they will change their decision so matter of starting again.
No lender cares about your individual business as you are merely a number to them.
In saying this some lenders are more sympathetic to deal with and you can access their credit departments and speak to the assessor.
Would never put Westpac in that category.
2 weeks for a 95% lvr where you would need to re-order the valuation is going to be pushing it.
Good luck.
Cheers
Youirs in Finance
Richard Taylor | Australia's leading private lender
Agree with the others – time to try another lender and two weeks is going to be tight.
Best off getting an upfront valuation or two carried out before submitting the application.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Baibai,
Truckloads of luck – I hope you are finding your way forward. And welcome to the forum too.
Just a thought out of left field – if the vendor was not needing ALL of the money right now, is it possible he might leave 20% in the deal as Vendor Finance? This would mean a whole new look at things – but, if they are wanting to sell, and don't need more than the 80% right now, maybe you can strike a deal that can still have this go ahead.
Of course, the Finance gents who have already replied can add more re the feasibility of such a move, so I will defer to their thoughts on that one.
Good luck with it,
Benny
Hi Benny
It is a good point you make but couple of considerations;
1) Westpac will not allow it some lenders will but they are not one of them.
2) Seller may have his loans crossed collateralised or owe more than 80% or may need more than this to move onto the next deal.
Doable but needs a rethink on strategy.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Qlds007,
Quote:Doable but needs a rethink on strategy.Hmmm, yeah – we need to know more of the seller's situation. I figured just by asking for VF it would show a bit re the seller :-
1. The seller was good enough to grant an extension without cost – maybe they have reasons to WANT this sale to go ahead.
2. Whether VF was even a possibility (what you said, Qlds re "Is it even possible for the seller?") Still a big unknown, but asking might provide some of the answers….. Worth a shot??
Benny
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