Dear ozbargainers
We have been applying to banks for a home loan.
One of the banks came back to us with a pre-approval with a higher than the current rate on their website.
When I asked, they replied that the (final) home loan will have the correct (discounted) rate.
Is that true?
Can the bank apply a different rate between pre-approval and final home loan?
Yes, if the rates change.
Some products however can let you lock in a rate for a cost/fee.
rate lock from pre-approval ?
username checks out
Yes nab allows rare lock for $300 fee
Yes.
the rate may not be the cheapest rate that displayed on their website.
Depending on many factors such as the amount your borrowing, the amount of deposit and others can all have a different rate.
If you are applying to multiple banks you may be hurting your credit score.
Please Please Please go see an expert before you do damage.
lol @ username
so sick
If you are applying to multiple banks you may be hurting your credit score.
We call that "competitive market".
The credit scoring system is anti-competitive.
Yes.
They'll offer you the best discounted rate after confirming finances and credit check at the time of unconditional approval.
interest rate are not final till you have signed loan contract document.
Happened in my case. Found better fixed interest rate just before signing contract and pushed back bank to match the rate. The lender was not happy and initially discouraged me going down path of re-negotiating but I still insisted. Within 24 hrs they matched the competitor rate and issued me updated contract doc to sign.
Long story short - you as homeowner can re-negotiate interest rate till you sign loan contract. And as bank they can change interest rate just before issuing loan contract doc.
This is usually related to the bank not including any additional discounts to the interest rate. Pre-approval usually has a standard rate because the bank will negotiate the rate based on final loan amount and % of the property value you are borrowing against. It's like the RRP but when you actually get the formal loan approval. The rate will be negotiated so you can increase your variable discount. Your banker or broker should explain this to you.
Pre-approval is largely meaningless.
Its more a "yes we will consider lending to you".