Something weird is happening to the mortgage market judging by the bevy of messages I have received in the past few days. Lenders, including those from the big 4 who have made a provisional commitment loan for a property transaction have pulled the pin before the final commitments are made.
In some cases, the loan is now being priced higher than indicated despite the rate cuts) , in other cases they just said no.
At least two DFA followers have been left high and try, and are trying to source alternative finance at short notice.
May just be a glitch, or this could be something more significant given the rising funding costs we are seeing in reaction to the global market uncertainties. A sign perhaps the mortgage market is freezing up?
For those with a property transaction in train, it is worth checking the small print if you have a mortgage ready to go – be sure it is fully unconditional, else you may be caught short!
And if you have experience this recently, let me know. This is something I need to monitor.
Martin- just wondering if those who have advised you of this had identified any reasons why this might have happened to them (ie, such as only having a cash deposit of 5 or 10% or having a job in an industry that may be seriously impacted by Covid-19)? I’m very interested to know because I have a conditional loan agreement in place right now (but have a safe-ish job and a higher than 20% deposit). Would hate to bid at auction only to find there is no loan to back up my bid!
Seems to be two things, first income was lower than stated, and second valuation lower than expected… read your small print….
Pretty standard behaviour for the last 20 years in my experience, I learnt a long time ago a bank home loan approval is only really approved the day after settlement, not before.