Hey Lifehacker, I'm in the process of asking my bank for a loan secured against a property I own. I'm wondering: why do they always ask me for my rates notice? What does this tell them? Why would they want that when they can do a simple search and see I own the property in question? Thanks, Bemused Borrower
Paperwork picture from Shutterstock
The ways of banks are often mysterious, and filling out any paperwork is invariably going to involve some wailing and gnashing of teeth. That said, the request for a rates notice is not that mysterious or onerous.
It's perfectly true that finding out if you actually own a given property is a relatively trivial task, especially if you're borrowing against a house which you have an existing mortgage for. However, the rates notice demonstrates something else to the bank: that you've remained up-to-date with property payments, and what the notional valuation of your land is according to your local council. It forms one more piece of evidence that you're a reasonable credit risk, and that there's an asset backing your loan if you do happen to default.
If any Lifehacker reader works as a loans officer and has more insights, we'd welcome input in the comments. Ultimately, however, you'll just have to put up with the documentation requests if you want the money. If you already own the home, that's unlikely to be an issue, but you still have to work through the process.
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