Aaarrgghh Banks and their loan policies!!!

[tgavin71]

I am a stay at home mum. I get a small amount from the government which in Australia most people get whether they are working or not. My husband works full time.
Anyway we recently refinanced our home loan so that we could do some much need renovations. Using on-line calculators we worked out that we could afford to borrow $225,000 and pay it of in less than 30 years when I return to the workforce in a year or so.
The highest we could get was no where near this amount. It was $156,000. Even though we had bank statements showing we had no credit card debt and our cheque account had not had a balance of less than $2000 for the past 12 months. With no choice we took the lower amount. Hopefully we will be able to get the work done. On the plus side we will be able to pay it off very quickly.
When I questioned the amount being so low I was told that "If you were working you could have borrowed more". And when I told the broker that it shouldn't matter how much you earn your borrowing capacity should be based on how much you spend his reply was " I am really sorry but I don't make up the rules".
Its like being frugal to save money so I can stay at home with the kids and provide a stable home has backfired. Has being frugal backfired like this for you?

[pearlieq]

Ugh. I'm sorry this happened to you.

[PrincessPerky]

unfortunatly loans are based on the majority, not the minority, the majority of people spend what they make..or more..so they figure you will, and things like a proven track record don't mean much..I really hope it doesn't make to much trouble for you, but it is normal.

Consider it a help in keeping you frugal as you improvement! no taking the highest estimate since you havn't got it

silver lining and all.

[boefixepa]

Also look at this way. Maybe you could do the renovation in stages. Yes it will take longer, but once you spend what you have you can then you can refinance again. Maybe by that time you can 'reuse' what you have paid off, or if it takes a little longer you will then be working and qualify for more. Things like this happen alot to those that are frugal. I've seen it happen before and I agree it's wrong, but as PP pointed out, the rules are baised on the majority, and I am GLAD I am NOT one of those.