NAB backflip on apartment size leads to $41,000 loss for first home buyer
A prospective homebuyer has told media that NAB pulled approval on his loan due to property size, leaving him out of pocket.
First home buyer Alexander Tashevski-Beckwith had saved his deposit, been approved for a home loan and found a home, all tough things to achieve in this hot property market. But then he received a call from NAB the day before settlement advising him that it was the bank’s policy not to lend for apartments under 50 square metres.
“They haven’t even left me with time to renegotiate another loan,” Tashevski-Beckwith told the Sydney Morning Herald.
The apartment in question is a 47 square metre, one bedroom apartment in Melbourne’s popular suburb of St Kilda. Tashevski-Beckwith said he received approval for a home loan after meeting with a NAB bank manager, as well as during conversations between himself, his mother and the bank manager via email and phone.
When it came time to settle on the purchase he was without the appropriate loan documents to finalise the sale, and any attempts to contact NAB failed. When he did hear from NAB, it was to inform him the loan would not go ahead and the bank manager he dealt with had resigned, the Herald reported.
“We were shocked,” said Tashevski-Beckwith. “There was no time, no due diligence given.”
A NAB spokesperson told Fairfax Media the bank was “keen to achieve the best outcome for [the family]”.
“They said, ‘we have a 50 square metre rule, but it should be fine,” Tashevski-Beckwith told the Sydney Morning Herald.
“They never led me to believe there was any concern there.”
On top of his $41,000 deposit, Tashevski-Beckwith may be also responsible for fees relating to settlement that would usually be paid by the vendor due to the last minute turn of events.
There are several aspects to a property that may affect your ability to get finance for it including the size, which Tashevski-Beckwith found out too late, location, building structure and more. These can also differ depending which lender you are applying with.
NAB has recently been capping loan-to-valuations for new lending in areas such as Melbourne CBD, St Kilda Road Central and Abbotsford, as they see these postcodes as future risk potential. The bank reiterated to Fairfax Media that it does not approve lending to properties under 50 square metres.
- Westpac home loan rate rise: 3 things you need to know
- Home loans take months, how does this bank do 7-day approvals?
- Finder’s RBA Survey: 87% of experts say consumer saving will dip as cash rate holds
- RBA Survey: Average Sydney house price to increase by $216,300 in 2021, say experts
- Property unaffordable for essential workers – is there a solution?