Major lenders have been taking longer to process loan applications in the past few months. The major factors increasing the length of turnaround times are low interest rates, government incentives increasing first home buyer traffic and a buoyant property market.
In the latest ABS report (November 2020), the survey showed a record high of mortgage approvals across Australia. As a result, major lenders are experiencing a backlog of loan applications, with some taking over a month to even assess.
If you’re looking to apply for a loan to purchase a property or refinance your existing loan, the lead time for your application to be processed will depend on its complexity and the lender’s policies and criteria. However, there are some things you can do to speed up the application process.
Understand your borrowing capacity
It is highly recommended that you know how much you can borrow before you start looking at properties and making an offer. Nothing is more upsetting than finding your dream home only to realise it’s out of your budget.
It’s important that you speak to a mortgage broker as they have the knowledge and expertise to guide you through the criteria that lenders will assess. Get in touch with one of our brokers to calculate your borrowing capacity and to understand the options available to you.
Have your supporting documentation ready
Ensure that you have the current and accurate documentation, and that you supply exactly what your broker has requested. By promptly supplying the correct documents the first time, you will prevent unnecessary delays. When assessing an application, if a lender needs to request additional documentation or documentation different to what has been supplied, your application often goes back to the end of the queue.
For documents such as pay slips, ensure that they are the latest pay slips. For bank statements and loan statements, make sure you provide the exact date range that has been requested.
Save Save Save
For first home buyers, continue to save and grow your deposit as genuine savings are a fundamental requirement for lenders where there is no existing equity in property. Anyone looking to borrow needs to ensure their bills and loan repayments are made on time, and that you are able to show regular savings to justify any increase in lending. This shows lenders you are responsible with your money and will be able to make repayments throughout the term of the loan.
With regard to genuine savings, some lenders accept regular rent payments as proof of genuine savings. Even if you use rent as genuine savings, you will still need to provide a deposit. There are many ways to successfully grow your savings – find what works for you, be disciplined and stick to it.
By using a mortgage broker, you take advantage of our professional expertise to find a suitable loan product. Launch Finance is one of WA’s most trusted broking firms, providing market-leading advice and assistance. Our award-winning team go above and beyond to provide clients a hassle-free experience and first-class service. Contact us today on (08) 9367 4222 or email [email protected].