I am having massive problems getting a loan and all for the wrong reasons.
I got a loan via a broker to purchase my land in 2012. at the time i wanted to put a shed on it, but decided against this as i thought my money would be better spent building a house.
while i was trying to figure out the best moves, i spoke with my bank about my options.
i was told i could borrow x dollars.
anyhow, i then went onto getting my house plans drawn, engineered, soil tests and so on.
i then approached the builders and got a quote for the house construction.
as i have already mentioned, i obtained pre approval for a house construction loan.
once i had the builders quote i took this to the bank. the bank informed me i had to then get a formal contract before they would go ahead with the valuation. i did this. during this process, the loan amount changed a couple of times with shifting construction details.
i asked the bank if the valuation would be problematic. i was told that valuations rarely come in at lower values.
however, this is exactly what did happen. the valuation came in at $90k less.
coupled with this, i was informed that the valuator said my type of house construction (steel frame) was overcapitalising.
i then suggested to the bank that i build only a 'portion' of my house. the house has been designed with this in mind. i can build two thirds of the house. the new house price was obviously much less. the bank got in contact with the valuator with my new approach and put forward my suggestion. the response i got back was the same: no matter what i do in terms of house size etc, i would still be overcapitalising!!!
i spoke with the bank about this and told them they misunderstood the construction concept. they think my house is a "kit home"when in fact it isn't. i have learnt that i can build in besser cement block and this would be acceptable. never mind the fact that in doing so, i t would end up as a sweat box here in the tropics.
since then, i have obtained a new quote for the original size house. its now $70k less!!! (i do believe the original builders quote was overinflated…but you live an learn as you go along!).
i bypassed the original bank as they did not express any interest in discussing my new quote. i approached another lender who has said they will lend me the money BUT i need to lower my Credit Score! I was shocked to learn about the unfavourable Credit Score. My credit standing is otherwise untainted. I have no problem servicing the loan amount. No other debts save for the land loan. No dependents. own my own new vehicle. NO rent. good income. life insurance. superannuation. etc etc.
I have since learnt that every time i spoke to the original bank, they loaded up my Credit Report with the enquiries. There is a total of 16 on the report.
This has meant all the times I have been discussing my options with the bank, trying to figure out what i can achieve etc, (just as anyone would do when about to make a life long commitment): these "enquiries" have been entered onto my Credit Report.
I was never informed that these enquiries etc would negatively impact upon my ability to borrow money.
I am effectively blocked from obtaining a loan.
I have lodged a complaint with the original bank and the financial ombudsman.
Can anyone offer some advice please? Im at a loss as to what to do. How does anyone new or unfamiliar to lending go about making bone fide enquiries without committing themselves to credit reporting each time you ask a bank if you can borrow money??!!
whats the point of "shopping around" if this is what happens? how can anyone get sound advice if you cant get a solid response from the bank?