Home buyers are typically advised to ensure their loan is approved before entering the contract, or before their contract becomes unconditional. Many home buyers in NSW sign their purchase contracts at the real estate agent's office. This normally entitles the buyer to a statutory minimum 5 day cooling off period. In this period, buyers normally arrange and finalise their home loan approval, see their lawyer, and arrange for property inspections.
I don't normally see my clients take notes, not that I mind, but most don't. A colleague recently told me a story of purchaser client was informed of their unconditional loan approval. The purchase contract then becomes unconditional. All was proceeding well until the lawyer contacted the bank to check on some documents. The bank advised their client's loan was declined! Not surprisingly, this caused a bit of a stir, panic on the client's part, and lots of stress.
The client was initially advised to obtain written confirmation of their unconditional loan approval. They didn't... they said they trusted their broker and the bank, as they had been so nice to them!!!
The saving grace, amongst the flurry of telephone calls and correspondence, was this buyer/borrower kept notes of her conversations. Using the information from those notes, the lawyer ascertained that after approval was granted, the loan application proceeded within the bank to the next level where it was declined at that second stage. At this point, the bank referred to an old (by about 3 years or so) valuation for the same property, not the valuation obtained a few weeks beforehand. Yes... the bank had made a mistake!
The moral of the story? Making notes certainly assisted this borrower's lawyer to pin down some sort of breakdown that occurred in the bank's internal process and have the bank re-confirm the loan approval.
What I think this story stresses too, is the importance for a home loan borrower to ensure that their verbal unconditional loan approval, for the amount applied for, is confirmed in writing by the lender to the borrower (NOT to the broker).
I don't normally see my clients take notes, not that I mind, but most don't. A colleague recently told me a story of purchaser client was informed of their unconditional loan approval. The purchase contract then becomes unconditional. All was proceeding well until the lawyer contacted the bank to check on some documents. The bank advised their client's loan was declined! Not surprisingly, this caused a bit of a stir, panic on the client's part, and lots of stress.
The client was initially advised to obtain written confirmation of their unconditional loan approval. They didn't... they said they trusted their broker and the bank, as they had been so nice to them!!!
The saving grace, amongst the flurry of telephone calls and correspondence, was this buyer/borrower kept notes of her conversations. Using the information from those notes, the lawyer ascertained that after approval was granted, the loan application proceeded within the bank to the next level where it was declined at that second stage. At this point, the bank referred to an old (by about 3 years or so) valuation for the same property, not the valuation obtained a few weeks beforehand. Yes... the bank had made a mistake!
The moral of the story? Making notes certainly assisted this borrower's lawyer to pin down some sort of breakdown that occurred in the bank's internal process and have the bank re-confirm the loan approval.
What I think this story stresses too, is the importance for a home loan borrower to ensure that their verbal unconditional loan approval, for the amount applied for, is confirmed in writing by the lender to the borrower (NOT to the broker).
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