Article by Patrick Lynch, Head of Operations at Long Property.
Securing finance to purchase a property or refinance a loan has become more difficult in recent months.
We all want applications to seamlessly progress from submission to approval and on to settlement with minimal effort or re-work. Often, what is overlooked is the step before the Lender receives the application – the gathering of supporting documentation.
This is the most critical part of any application process, but can also be the most time consuming and frustrating part.
The Lender will not be able to complete assessment until they receive error-free and complete information and documentation. Assessment without total disclosure can be detrimental to your application, and may result in:
- A conditional approval where the conditions aren’t possible to be met;
- Back and forth requests that result in delays. potentially missing purchase settlements; or
- Full declines.
Engaging an experienced mortgage broker is a great way to ensure you get the application process correct, and it increases the probability of getting your loan approved in one go.
To minimise disruption and/ or costly errors, your broker will provide you with a list of the documents needed to progress your application, based on discussions around your financial circumstances, requirements and objectives. The list should meet the Lender’s policy. The broker will also provide you with precise instructions and ways to respond such as online portals or email.
Once the Lender has received the correct supporting documentation, they can begin assessment, getting you on the way to a better loan structure or interest rate, or purchasing that new home or investment property.
Here’s an example – the Client approached us seeking finance for an investment property purchase with a short settlement. We were explicit in the supporting documents required and the forms to be signed. We explained why one of the income verification documents provided didn’t meet the Lender’s requirements, as part of our obligations under responsible lending, and did not submit the application until everything was in order. It took a little more time up front but the application went straight through to approval and will proceed to settlement without unnecessary delays or re-work for all concerned.
