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Client story · published with the clients’ permission
The bank declined it. The bank’s own policy said yes.
A husband and wife had signed a contract on an investment property and paid the deposit. Then the lender declined it: capacity to service not evident, short $2,128 a month. The document that reversed it was the lender’s own credit policy, page 49.
Bring the decline letter. Thirty minutes, and you will know whether the file was read under the right rule.
The file
- Corporate trustee for a family trust
- Residential investment purchase
- Two lenders in the picture, not one
The numbers
- New lending $440,000
- Total lending assessed across both lenders $856,000
- Servicing shortfall at the point of decline $2,128 a month
The outcome
- Decline reversed on the lender’s own policy
- Conditional approval, then settlement on the contract date
- No accountant engaged, no company financials supplied
What went wrong
Declined over income the lender was already allowed to count.
He runs a business and works full time as a general manager. She works two jobs, one of them in the family company.
The assessor would not count her income from that company. The instruction was to supply company tax returns and financials if we wanted it considered.
That is not a small ask. It means an accountant, a fee, and weeks, on a file with a live contract and a deposit already committed.
What was at stake
Not a rate. Not a product.
A signed contract with a deposit already paid, and a family who had committed to a property they intended to hold for years.
When a buyer cannot complete, the deposit is the first thing at risk. Depending on the contract, not always the last. Most buyers do not learn that until it is happening to them.
What I did
Same income. Different door.
I said no to the route the assessor offered. Not because the documents did not exist, but because a stronger argument was already sitting in that lender’s own credit policy, on page 49.
1 · The policy on page 49
She was already an employee of that company, earning $30,800 a year. Under the lender’s related party employment policy, that income is assessable on an ATO income statement. No company tax return. No financials. No accountant’s fee.
2 · The facilities dragging it under
The existing loans with the second lender were what pushed servicing negative. My clients held $156,000 in available redraw and $144,000 in offset. I put all of it forward and offered to reduce balances before settlement.
3 · The credit card
Closed before settlement. Offered, not requested. I would rather clear a commitment off the file than spend a submission defending it.
4 · The income I left out
The second business income was left out deliberately. The deal serviced without it, and every extra income stream is one more thing an assessor has to verify. Fewer questions, faster answer.
A $2,128 monthly shortfall, closed without supplying a single document the assessor had asked for.
The file in three numbers
The file never changed. The reading of it did.
Client details anonymised and published with permission. Figures are file-specific and the call count is our own record. Not a representation of typical results. Every application depends on its own facts, structure, security position and the lender’s criteria at the time. Subject to lender criteria and eligibility.
Behind the scenes
The job was not to argue. It was to get the file read properly.
The decline did not come from someone who had decided this family could not afford a house. It came from a credit assessor working a queue against a policy manual, under a service level clock, reading fields on a screen.
I know that because I used to be that person. I sat on the credit side and approved loans before I ever wrote one.
So the job was to get the file in front of someone with the authority and the context to read it properly, and to hand them something their own policy already said yes to.
Six days before the decline arrived, I had asked the lender’s relationship manager out for a coffee. No agenda, nothing pending. When I needed him the following week, I was not a stranger with a problem. And when I went to him, I asked for his help. I did not hand him a complaint. Nobody inside a bank has ever moved faster because a broker was angry with them.
Thirty-nine phone calls. Assessment line, relationship manager, broker support, case management. Most of them went nowhere. That is the part of this work nobody sees and nobody bills for.
At one point I was told the file had been escalated. I rang the lender’s broker support line to confirm it. It had not been. I went back, said so, and it was escalated properly.
Being told something has been done is not the same as it being done.
How it ran
Seven stages, one of them a reversal.
| Stage | Detail |
|---|---|
| Contract signed, finance clause running | Deposit committed |
| Application lodged | $440,000 |
| Declined | Servicing short $2,128 a month |
| Policy argument submitted | Page cited, eight documents attached |
| Escalated through the relationship manager | Escalation confirmed directly with broker support |
| Conditional approval | Same file, read under the right rule |
| Settled | On the contract date the clients had signed |
This one took months, not weeks, and I will not pretend otherwise. It was a fight worth having, because the alternative was a family losing a property and a deposit over a rule the lender had already written in their favour.
Why this happens
A decline is a reading of your file, not always a verdict on your finances.
An assessor is not anyone’s enemy. They are reading a screen, under a clock, against a policy manual most brokers have never opened.
When a file is declined, it is often not because the borrower cannot afford it. It is because nobody put the right rule in front of the right person.
If a lender has said no to you, the question worth asking is not whether you can afford it. It is whether anyone read your file under the right rule.
Priyank Thakkar, Chief Vision Officer and Finance Broker, Prevail Finance · former bank commercial credit assessor and lending manager · Read his story →
Straight answers
If you have just been declined.
Can a bank decline be overturned?
Sometimes, and more often than most borrowers assume. A decline is a decision made against a policy manual by an assessor reading fields on a screen, usually under a service level clock. If the file was assessed correctly against the right rule, the answer will not change. If a rule that applies to your circumstances was not applied, or strength in your position was never put in front of the person with authority to weigh it, the file can be resubmitted with that argument attached. On the file described on this page, the argument came from page 49 of the lender’s own credit policy, and the decline was reversed without supplying a single document the assessor had asked for.
Should I just go to another lender after a decline?
Not before you know why the first one said no. Moving to a second lender without changing anything gives you a second decline and a second credit enquiry on your file. Credit enquiries are visible to every lender who looks afterwards, and a run of them reads badly. Read the decline first, establish whether the problem is the deal or the way the deal was presented, then decide whether the fix is a rebuilt submission to the same lender or a different lender class entirely.
What happens to my deposit if finance falls through?
That depends on your contract, and it is worth knowing the answer before you need it. If a finance clause is in place and you comply with its conditions and timeframes, you can usually terminate and recover the deposit. If the finance clause has expired, was never included, or its conditions were not met, the deposit is at risk, and depending on the contract it is not always the limit of what you can lose. This is a contractual question for your conveyancer or solicitor, not a lending question, and it is the reason a declined file with a live contract is treated as urgent.
How long does it take to reverse a decline?
Longer than a fresh application, and we do not pretend otherwise. A resubmission has to be built, evidenced, lodged and then escalated to someone with the authority and the context to read it properly, and each of those stages sits in a queue. The file described on this page took months rather than weeks. Whether that is worth doing is a commercial decision, and it turns on what is at stake if the purchase does not complete.
Next step
Bring the decline letter.
Thirty minutes with me, and you will know whether the file was read under the right rule, and what it would take to have it read again. No application, no credit enquiry, and no lender sees anything until you say so.
Or call Priyank directly on +61 404 442 211.
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