Whilst the media and RBA are stealing all the spotlight with interest rates, there are many more factors to the mortgage world. One of the main ones, which can cause the most stress, is the process between the loan application and settlement.
Banks require a lot of personal information to support their assessment. Although there have been many improvements to streamline these processes, some banks/lenders remain in the past with their outdated procedures. I’m going to show you how to make the process as hassle free as possible.
Point 1: Some banks won’t ask for your bank statements… Some will.
Within the last year, banks are becoming more reliant on comprehensive credit reporting. Removing requests such as bank statements and evidence of liability repayments. Gone are the days where assessors go through all your spending habits with a fine-tooth comb. So, if you spend $100 a month on SportsBet or indulge in the odd expensive dinner, some banks will be none-the-wiser.
Broker’s tip: If you bank with the lender you are applying for a home loan with, they can see everything! Always a positive to diversify your portfolio with different banks/lenders if you don’t want them knowing what you ate for breakfast.
Point 2: Your credit file matters
Lenders are using Comprehensive Credit Reporting (CCR) to assist their loan application assessments. CCRs can also be referred to as “Credit Checks” or “Credit Scores”. This is one of the first items we as mortgage brokers review.
The requirement for supporting documents will always chop and change but the reliance on comprehensive credit reporting is great for borrowers. If you would like us to run your free comprehensive credit report before applying, please reach out to your broker. All that is needed is your driver’s license. It is sometimes the case where clients have credit cards still open from 25 years ago that they thought the bank closed. This can cause bumps in the road to a successful application.
Broker’s tip: anytime you close or discharge a liability, give the bank a call and tell them to close it on your credit file. Most will drop off after 24 months, but this is not always true.
Point 3: Why do some banks still use paper!! E-Signatures
With everyone’s appetite for “going green” and better hygiene due to COVID, lenders are finally turning to electronic documents and e-signatures. Platforms like Docusign and Pandadoc are becoming increasingly utilised to assist borrowers fast-track the process from application to settlement. The process using paper documents can take up to 2 weeks to complete whereas e-signatures take one day, even hours to complete.
Broker’s tip: The other thing to consider is the state you live in. The e-sign movement is not only for the banks, but some states are well behind! *cough cough ACT/QLD cough cough*. When buying/refinancing a property, be sure to confirm the process upfront. It can be the difference between settling in time or paying penalties.
Our aim at My Mortgage Freedom is to make the mortgage journey as smooth as possible. We realise everyone’s ability to use technology and provide documentation is different, so we craft an experience that suits you. We will facilitate and educate you through the process in the best way possible