Are you wondering “what do I need to do to get a loan?”
I am getting asked more and more about how hard it is now (due to Banking Royal Commission) to get a home loan. People are hearing stories of loans declined and are nervous about whether it could happen to them.
Our experience is that the impact of the Banking Royal Commission has been in two main areas;
First is that many lenders are now asking for more documents to verify information previously accepted when declared by applicants (eg living costs).
Second to this is that banks are taking the time to review more closely all documents to ensure the Government can’t accuse them of lack of diligence in the future. The scrutiny often results in requests for more documents and more work for lenders. The problem is that lenders have not yet systemised this additional work or hired more staff to deal with the extra work, which is causing big delays and creating a perception that it is a customer issue when it is really a lender issue.
For most people loans are still achievable, but currently there are delays at the lender end. Fundamentally, getting a loan is much the same as it has always been with loan amounts slightly down to reflect higher cost of living.
Some people are, however, incurring problems as the documents they are supplying have issues that need to be resolved. Mostly these are minor things like inconsistency of the person’s name across various documents (eg a middle name missing or an abbreviated first name). This is where a great broker can help. Getting all the documents a lender wants to your broker, so they can look at every aspect and alert you to problems before submission, will allow you to delay an application, rectify issues and avoid an unnecessary credit file enquiry.
Our preferred lead time for an initial meeting is 3 months before you think you will want a loan. As the saying goes ‘prior preparation prevents poor performance’.
If you are wondering what do i need to do to get a loan, contact us today.
The future is a different story with errors in the final report leading to a misunderstanding by both sides of politics. Our politicians believe that mortgage brokers are an “additional” cost to getting a loan, when are in reality and “alternative” to the in branch cost of loan officers. They want people to pay brokers a fee and plan to do this by making it illegal for banks to pay us. This includes refinancing, which could mean people get stuck with a crap interest rate because they can’t afford the fee to change. As their is an election soon, we hope everyone checks what their local candidate will do before voting them in.