8 minutes
It’s every first home buyer’s worst nightmare. You’ve searched hard to find the right property, been pre-approved for a home loan, put in a successful offer, and paid your deposit - only to have your loan declined the day before settlement.
That was the situation facing Brisbane-based doctor Daniel Varma and his partner Michelle. When the couple received news from the bank that their home loan had been declined the day before settlement was due on their new townhouse, they were confronted with the very real prospect of losing their considerable deposit and potentially facing legal action from the developer of the townhouse.
“I had already paid the developer a $32 000 deposit when the bank told us they would be declining the loan,” says Dr Varma. “This happened just days before settlement was due and put us in a position where we would be in breach of our contract with the developer. That meant he would be able to take the $32 000 and potentially sue me for damages.”
To add insult to injury, this all came at a time when the couple were in the midst of relocating from South Australia to Queensland.
Dr Varma was due to start a new job at Princess Alexandra Hospital in Brisbane’s inner-south, and had set the original settlement day for two weeks prior to his first day at the hospital to give him sufficient time to relocate.
However, the delayed settlement meant that Dr Varma was forced to couch surf with friends in Brisbane while starting work at the major public hospital. Meanwhile, Michelle was left to pick up the pieces of their stalled home loan.
Dr Varma and Michelle couldn’t have been more surprised when news came through that the bank was declining their loan. At the time, Dr Varma was making a six-figure income working in the cardiology departments of several private hospitals in Adelaide, and their mortgage broker had previously assured them they would face no problem getting final approval for the home loan.
“We had conditional approval and the bank gave us the go-ahead to progress with the purchase,” says Dr Varma. “At no point did they even give us the slightest shred of doubt that we’d be approved.”
Instead, Michelle was informed through the couple’s mortgage broker that the bank had changed their lending policy with immediate effect.
“Apparently, the bank had a big meeting literally a day before our settlement date and said they had changed their policies and weren't going to recognise Daniel’s income anymore,” Michelle says.
“We were told this was because most of his work was casual or locum, and they were not going to recognise that income, even though he had been employed by the same hospitals for around three years.”
However, this wasn’t the first problem the couple had encountered with the bank - loan approval had already been delayed by months due to a clerical error.
“Rather than processing me as a medico under special conditions, they put me into the general stream,” says Dr Varma. “When we asked why approval was taking so long, the bank realised they had made a mistake, but that was another stuff-up that took months.”
So by the time the loan was declined, Dr Varma and Michelle were out of patience.
“We were pretty upset and worried we were going to lose a lot of money and the place we wanted to buy,” says Dr Varma. “So, having gone through three months of this, only to start again was really hard. It was pretty daunting and intimidating.”
Fortunately, Dr Varma need not have worried. When their mortgage broker suggested they contact the BOQ Specialist for help, the couple were impressed from the moment they spoke with Clayton Christie.
“Clayton was excellent,” says Dr Varma. “He was very clear about what he needed from us and while he assured us that he would do his absolute best to push our loan application through as quickly as possible, he made no guarantees. We really appreciated that honesty after our previous experience with the big bank.”
“Daniel and Michelle came to me two days after formal approval was required,” says Clayton. “They were facing legal ramifications as well as the possibility of forfeiting their deposit. I’m happy to say we were able to settle their loan within 12 days—really anything faster than 30 days is pushing uphill.”
The difference, says Clayton, was BOQ Specialist’s willingness to recognise Daniel’s locum and casual income.
“Doctors are mostly self-employed but a lot of other banks require you to have consistent employment for at least two years. But the reality is that doctors move around a lot. The difference was that through our knowledge of the profession, we are able to recognise income streams that other banks will not.
In this case, Daniel’s bank was not willing or able to take his locum or casual work into account. We were.”
A couple of weeks later, Dr Varma and Michelle were enjoying their brand new home with their big bank troubles rapidly becoming a distant memory.
“Clayton was excellent,” says Michelle. “He was very calm about it all. With other brokers, there was always something else they needed or something that changed at the last minute. That certainly wasn’t the case with Clayton.”
“He was very good interpersonally, and very reassuring,” agrees Dr Varma. “He deserves everything that’s coming to him for his professionalism and kindness. We’re going to play golf together in a couple of weeks. He’s a great guy.”
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