Promoted by Mortgage Choice.
Brokers across the country are grappling with the impact of developments in the current lending environment, which have significantly reduced borrowing capacity for everyday Australians by up to 20% and introduced the forensic analysis of household expenditure and living costs.
With every home loan application now very much under the lenders’ microscope, it’s more important than ever to maximise the chances of preparing a successful home loan application.
Here are some tips from Mortgage Choice on how to help get a customer’s home loan application through in a tougher lending environment.
Best to get it right the first time
Lenders have been pushing back on their exceptions limit of late. Some lenders are reserving their daily limit for true exceptions rather than making exceptions for missing documentation and some are sending re-submitted applications to the back of the queue.
Brokers need to ensure they collect all of the documentation and information required for an application the first time in order to avoid delays. Missing bank statements from the last six months or omitting to include letters of verification is likely to hold up otherwise good quality applications.
Keep customers informed
Keep your prospects and customers informed, so those who are planning to apply for a home loan in the near future can start getting ready now. With lenders questioning borrowers’ living expenses down to the last dollar, educating customers to monitor their discretionary spending is critical. This provides brokers with a fantastic opportunity to demonstrate their value by coaching customers on how to avoid raising red flags with lenders. Help them prioritise their spending on what is important. For example, customers who regularly eat out may be seen as extravagant and could consider switching to home cooking to maximise their savings potential.
Lenders are assessing the 12 standard categories of living expenses based on what is regarded as reasonable expenditure, depending on the number of people in the household and other factors such as income and postcode.
The lenders are forensic in their investigations. Recently, a broker was questioned about a $1000 Ticketek expense on a customer’s credit card, as the lender was concerned it was a regular purchase. The customer had purchased tickets to a concert on behalf of her friends who reimbursed her in cash. Another broker provided a very detailed breakdown of a customers living expenses only to have the lender come back seeking justification for a fortnightly $26 expense for their child’s swimming lessons.
It’s essential to review a customer’s living expenses prior to application and ensure all spending is accounted for.
Consider Mortgage Choice
With increased scrutiny on lending practices and technological disruption driving change across the industry, mortgage brokers need a range of support services to set up and grow their businesses.
Mortgage Choice’s brand new web-based Broker Platform is significantly improving broker productivity. It is intuitive and includes some great features that will improve the customer experience.
Our new remuneration model includes a unique hybrid structure that supports businesses at every stage, from startup to investing for growth. Combined with the strength of our quality training, compliance support and loan submission coaching, Mortgage Choice is worth a look.
Find out more about how to become a Mortgage Choice franchise owner, either by purchasing a new business or an existing business with an established customer base, by calling 1300 650 330 or visit https://www.mortgagechoice.com.au/hello/join-us/