Browse Forums Home Finance 1 Sep 01, 2010 1:30 pm Hi Am in a strange situation. please let me know what are the chances of getting the deposit amount Problem I made an application for a 95% loan. I got unconditional approval(signed the contracts after getting unconditional approval) from bank and based on it i paid 5% deposit for a home and land package. Now the insurance company who's doing the mortgage insurance is not insuring the mortgage and bak declined the loan stating it as the reason. I applied for loan in another bank. loan was rejected What are the chances of getting the deposit back because bank has declined the loan? Thanks Re: loan declined after unconditional approval 2Sep 01, 2010 1:34 pm If your loan is declined, you will get your deposit back, no ifs and buts. Contact your bank. Ocean ...... Re: loan declined after unconditional approval 3Sep 01, 2010 1:47 pm What sort of documents do i need to provide to builder.Will a letter from bank stating the loan declined will do? Re: loan declined after unconditional approval 4Sep 01, 2010 3:08 pm It really depends on the conditions of your contract as to if you can get your 5% back. Contracts vary between states. Refer to your contract and or a solicitor. Just to let you know if the mortgage insurer had not approved your loan then it wasn't unconditionally approved. Whoever told you it was unconditionally approved, be it a broker or bank staff member, hasn't done their job properly. Re: loan declined after unconditional approval 5Sep 01, 2010 3:28 pm WinfieldCharcoal If your loan is declined, you will get your deposit back, no ifs and buts. Contact your bank. Ocean Why would you say something like that? Have you read the contract? Only if you have a subject to finance clause can you back out with no penalty. Re: loan declined after unconditional approval 6Sep 01, 2010 3:45 pm travelbug Why would you say something like that? Have you read the contract? Only if you have a subject to finance clause can you back out with no penalty. Agreed. I have never bought a house & land package but unless these builders use contracts that offer much greater than normal leniency for buyers (hard to believe), you would have needed to add a clause to get out of the contract without forfeiting your deposit. Crossing my fingers for you. Re: loan declined after unconditional approval 7Sep 02, 2010 9:31 am I signed the contract only after getting unconditional approval and paid the deposit. Haven't needed to put " Subject to finance" because the loan was unconditionally approved.(never thought that insurer will back out and the loan will be declined). Re: loan declined after unconditional approval 8Sep 02, 2010 9:35 am tobehomeowner I signed the contract only after getting unconditional approval and paid the deposit. Haven't needed to put " Subject to finance" because the loan was unconditionally approved.(never thought that insurer will back out and the loan will be declined). Do you have correspondence from the bank stating you had unconditional finance? ~ trying to build our dream home by the sea ~ Re: loan declined after unconditional approval 9Sep 02, 2010 2:54 pm tobehomeowner I signed the contract only after getting unconditional approval and paid the deposit. Haven't needed to put " Subject to finance" because the loan was unconditionally approved.(never thought that insurer will back out and the loan will be declined). The insurer doesn't just turn around and unapprove a loan. Once they have approved it the chance that they will change their mind is slim to none. More likely is that the lender hadn't sent it to the insurer at all. They should not have told you it was formally approved until the insurer has approved it. Re: loan declined after unconditional approval 10Sep 02, 2010 5:43 pm RaryGirl tobehomeowner I signed the contract only after getting unconditional approval and paid the deposit. Haven't needed to put " Subject to finance" because the loan was unconditionally approved.(never thought that insurer will back out and the loan will be declined). Do you have correspondence from the bank stating you had unconditional finance? Seconding this. viewtopic.php?f=31&t=37229 - our Iris 4! Re: loan declined after unconditional approval 11Sep 07, 2010 2:36 pm I dont think you will get your deposit back, it sucks but chalk it up as a lesson learnt. You can try a broker to see if they can get you the finance. For next time remember that words are worth nothing unless they are on paper. You have no written proof other than a verbal OK from the bank. And even if I have finance in place, I ALWAYS put subject to finance, you just never know (lose your job, need money for some emergency etc)......... Re: loan declined after unconditional approval 12Sep 12, 2010 8:50 am If you have documentary evidence of unconditional approval, the bank has to honour it. The insurance issue is their problem. Even if you only had a verbal assurance of unconditional approval, if you have the name of the person you spoke to and the date and time, you can take it further. Lodge a formal complaint with your bank - they'll have a complaints department you can go through. If you get no joy there, complain to the ombudsman. It won't cost you anything, and depending on the cirumstances (you haven't given many details) you may well come out in front. At the very least, you'll be no worse off. Re: loan declined after unconditional approval 13Sep 14, 2010 5:38 pm I had the same sort of thing with my bank, they gave my unconditional approval in writing, then the next day they said that on settlement I would have to pay and extra $2,660, I'm currently fighting with the bank, as they cant give unconditional approval until the LMI has given the go ahead, and if they do then it is their problem. I would seek some legal advice as you would have a fairly good case Re: loan declined after unconditional approval 14Sep 15, 2010 4:13 pm Thanks for all the inputs. I have unconditional approval from bank in writing even before the insurance declined the loan. Fighting with the bank. Will let you all what the outcome would be. Hoping for a positive result... Re: loan declined after unconditional approval 15Sep 15, 2010 4:23 pm Good luck you poor dear. Nonna's Nest House set for completion November 2013 Re: loan declined after unconditional approval 16Sep 19, 2010 11:32 am tobehomeowner Thanks for all the inputs. I have unconditional approval from bank in writing even before the insurance declined the loan. Fighting with the bank. Will let you all what the outcome would be. Hoping for a positive result... Don't waste time and energy fighting with the bank. If they're not honouring their commitment, just go to the ombudsman. It costs you nothing, and usually results in a very fast about-face on the part of the bank. Re: loan declined after unconditional approval 17Sep 21, 2010 6:47 pm Good advice KEK, The ombudsman is a great resource for this situation. You will find though that they will want to see that you have 'tried' to resolve the matter with the bank prior to going to them. I would still suggest having a solicitor to check over the contracts you had in place. Even if it is a house and land package if the deposit is specific to the land purchase you have a chance of getting it sorted.. From a finance point of view you want to try and find out why the mortgage insurer declined the loan also. This may be crucial information for you. This will help you decide if there is a chance of taking it to another finance institution to get it across the line. If it is a reason that should of been evident and would of clearly not been accepted by the mortage insurer then the lending officer you were dealing with or broker should of reasonably known this and not issued unconditional approval. Another option is to speak with the builder and if they havn't used the deposit towards soil tests, engineers or anything at all etc. Then you may be able to negotiate with them to use those funds towards one of their packages in say 6 months time once you save, earn, borrow a further 5% to get your loan under 90% thus (in theory) be able to get it approved. Once again though, this depends on why it was declined. If its nothing big then at 90% you might be fine. If you have any questions involve more private details then feel free to private message me. Regards, Trent Davidson Property Finance Consultant Residential Lending LJ Hooker Finance Brisbane North Credit Representative Number: 387283 under Australian Credit Licence:380270 Re: loan declined after unconditional approval 18Sep 25, 2010 1:51 pm Thank you all for your support and the guidance... Raised complaint with the complaints department of the bank and warned them if they don't take up this issue seriously would approach ombudsman. Things seems to be moving alright now... Re: loan declined after unconditional approval(finally appro 19Oct 04, 2010 3:14 pm Hi All, Loan finally got approved today. Thank you for all your support and information No idea why it was declined first. Bank didn't disclose the reason. Can't be bothered to know now as all i want was loan to be approved Once again thank you all for your support and guidance Thanks KG The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19097 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11916 1 2988 |