Changing Lenders after Preapproval

sclass on 26/05/2022 - 23:07

I'm three months into my property search with preapproval expiring shortly but I have found a property of interest which I'll bid at next weekend.

However, after recent interest rate changes, I have found a comparison rate better than the lender I have preapproval with (0.06% pa difference which will amount to ~$800/yr) with similar features (redraw/offset, no fees). Is it worth trying to get a new preapproval with the new lender (Athena) in the next week or should I just go with my existing lender (and refinance sooner rather than later)?

Home & Garden

Comments

  • Hybroid on 26/05/2022 - 23:13

    Absolutely you should try to get new pre-approval sorted out ASAP. As long as you have the 10% payment at auction win, you still have a little time to sort it out afterwards too. At very least you have the original to fall back on. No brainer.

    • sclass on 26/05/2022 - 23:17

      Thanks for the quick reply. Would the impact of having another credit check be negligible?

      • Hybroid on 26/05/2022 - 23:19

        Umm, pass. The broker I dealt with said the pre-approval credit report won't affect my credit rating but I don't know for sure and unable to confirm.

  • avoidfullprice on 26/05/2022 - 23:39

    https://www.athena.com.au/faq/home-loans-for-buying-property

    How long does it take to receive pre-approval?

    We've been swamped with applications!  We love it, but honestly, it means we can’t get to everyone as fast as we’d like. So nobody misses out on their dream home, we're currently only prioritising and processing customers who have a contract of sale

    So you either miss out on a mortgage bargain, or risk missing out on buying a house. Tough choice. I'd go with existing lender for less stress. You're looking at extra 1% interest rate over next year anyway, so c.f. extra $13000pa of interest, $800 seems small.

  • icejester on 27/05/2022 - 02:13
    +5

    0.06% is not worth changing

    It's such a small difference
    If you're concerned about 0.06% and $800 saving on interest rate, you gotta have a rethink about your financial situation
    $800 on a 1.3m purchase is just an insignificant sum

  • popcornready on 27/05/2022 - 07:13
    +2

    You can always refinance after a few months post settlement

    • BlueGlass on 28/05/2022 - 20:50

      Refinancing is one of the most effective solutions to a whole range of issues with the banks. Can't recommend this option more.

  • jsb on 27/05/2022 - 09:18

    It appears there's a bit of confusion out there regarding this.

    Pre-approval is exactly what it says and you are not bound to go with that bank. Also, you don't need to get multiple Pre-approvals unless you need more borrowing power than this Pre-approval is offering.
    If it's expiring soon, just contact your broker or bank and they can extend it for 3 months without credit check.

    Once you sign the contract for the property, you can shop around and directly apply for approval with a new bank or negotiate with existing bank.

    Getting a Pre-approval just gives you confidence regarding your budget and how much you can bid. Nothing else

  • Muzeeb on 27/05/2022 - 10:30

    By time you purchase and settle the rates would probably have changed 2 or 3 more times given the current climate.

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