There are two stages to securing your finance for an investment property.
Pre-approval is the amount the bank or lender is willing to lend based on your employment status and the financials you have provided them. This pre-approval is used to help you identify potential properties within your budget.
Formal approval is when the bank or lender, following a detailed review of your application and subject to a valuation on your intended property, is satisfied with all the conditions and provide confirmation they will fund your purchase. Formal approval allows you to proceed with your property purchase.
Importantly, for new house & land packages, formal approval can only be provided once Land Registration is complete and the building lot established.
What happens if my loan isn't approved?
When providing finance, often banks look at new house & land packages differently to established homes, as they are providing their valuation on an unbuilt property.
Banks have set criteria and at times may conservatively underestimate rental returns. If a lower estimate is provided by a valuer, this can affect how much the bank is prepared to lend.
Should this occur with your selected property, there’s no need to panic.
This is a common industry process and we have deep experience in property finance with access to more than 30 major lenders, so we’ll look to find a other providers to fund your investment.
What are your options?
DPN can resubmit the loan documents to have a second valuation undertaken by a different independent assessor.
Failing that, DPN can reapply through an alternative lender on your behalf, whose variation on serviceability policy could gain you approval. This also means we need to recommence the loan application.