Correspondence did not suggest approval to borrow more than $1.5 million

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Correspondence did not suggest approval to borrow more than $1.5 million

Categories:

Concerns about lending decisions,

Summary:

In 2020, Max obtained pre-approval from his bank to borrow up to $1.5 million to buy property. Max had further discussions with the bank, and as a result he considered it approved lending for up to $5.1 million. Max signed contracts to buy two properties, but was unable to buy either of them because the bank would lend him only $1.5 million. Max complained to us that the bank misrepresented how much money he could borrow.

Published:

June 2022

Our investigation

We could find no correspondence from the bank indicating it had approved more than $1.5 million. All the correspondence did, however, suggest it would be prudent for Max to make any offer conditional on final approval of finance from the bank. We therefore concluded the bank had not misrepresented how much he could borrow.