bridie

We just applied for a new mortgage, $146K, we already have a mortgage of $85K and it doesnt take a genius to see that we are borrowing up to our limit.

Today recieve a letter from the bank - we've been pre-approved to borrow up to another $50K?!

We are intelligent enough to realise that to borrow any more would be crazy as there is no way we can afford to pay it back, but what if our circumstances were different and we really needed this extra cash and decided just to borrow it.

In the past I've honestly thought that people who borrow too much dont deserve much sympathy BUT getting a letter like this I can really see how tempting it must be to some people.

Shame on the banks for behaviour like this

NKSK version 2

I'm amazed by this. I assumed that in the era of the credit crunch, these offers were well and truly over.

busterboy

We were gently encouraged towards a house purchase towards the upper, upper, upper end of our budget just in December 2007.

Vash the Stampede

The credit crunch hasn't hit Australia (yet). So the banks are trying to make hay while the sun shines.

paddyo

lol.,..don't take it personally...its just business!!!

jayr

It's not really the banks' fault. It is between you and the bank to decide what to offer and what to take out. Presumably you have no complaint with shops offering for sale things that some people can't afford to buy?

Wave the Sails

I think it has. We had to provide a lot more info for our last investment property.

Wave the Sails

This just reminded me...........

When I was at Uni I got a 'bit' overdrawn, but the bank kept extending my limit in spite of me having no income (apart from a cleaning job). During an audit they pulled out ten accounts at random. Mine was one of those

Cue being hauled into the bank by the Manager and having my cards taken away (and given a nasty talking to). I was really upset and told my parents about it. My dad stormed into the branch and told said Manager 'you are the one about to take the rap for this, for being bloody stupid enough to lend it to her'. Go Dad

I love how parents defend their kids, when I was obviously in the wrong

Vash the Stampede

That's a common procedure. I found the same thing when I bought my second investment property in April 2007, long before the credit crunch even existed.

If the credit crunch had hit Australia, we'd know all about it by now - and it would bring a lot more hassle than just a few extra forms at the bank.

bridie

I'm not saying it's a problem for me personally, but I can see how tempting it might be to someone who is struggling and doesnt think of the consequences of having to pay it back.

The difference with a shop is you choose whether to walk in a shop or not... this is a letter delivered to our door, in the bank's envelope so obviously we would open and read it.

I was just amazed that's all... esp when it would be obvious to someone with the brain a size of an amoeba that there is no way we could afford to borrow that much - and they have all our info as we had to give it to them to get this new mortgage.

bridie

really?
wow you learn something new everyday.......

Vash the Stampede

All they're interested in is your ability to pay the mortgage, and the viability of your home as security. Assuming that your mortgage isn't sub-prime, they're sitting pretty.

If you continue to pay without problems - they win. If you fail and they have to take your house off you - they win.

It's a great business to be in.

bridie

oh yes

Wol

Don't you just love the way they've appropriated the word "Sub-prime" to describe what are effectively JUNK mortgages?

So those old Junk bonds were really "SubPrime" bonds <g>.

Vash the Stampede

It's one of those irregular verbs, isn't it?